SpaceX stock drop follows $18.4 billion AI spending surge
SpaceX shares fell more than 10% before the open after strong Q2 results were overshadowed by a sharp increase in AI-related spending.
By Dev Ramirez · Crypto Correspondent
· 3 min read
SpaceX stock drop AI spending concerns took center stage Wednesday, when shares fell more than 10% in premarket trading after the company’s first public earnings report. The results beat analyst expectations, but CNBC reported that investors were focused on SpaceX’s $18.4 billion second-quarter capital-expenditure bill, most of which went toward AI.
The move followed an approximately 8% decline in extended trading Tuesday after the results. For investors, the report set up a clear tension: revenue and losses improved faster than Wall Street expected, while the company’s spending grew far beyond its quarterly sales.
Why did SpaceX stock fall after earnings?
SpaceX reported $7.81 billion in second-quarter revenue, ahead of the $6.93 billion consensus estimate compiled by LSEG, CNBC reported. Its loss was 9 cents a share, compared with an expected loss of 26 cents a share. Revenue rose 92% from a year earlier and net loss narrowed to $541 million from $1 billion, according to CNBC.
Yet quarterly capital expenditures rose sixfold to $18.4 billion, CNBC reported. That amount was about 2.4 times the company’s $7.81 billion in quarterly revenue. CNN reported that the spending exceeded the roughly $13 billion analysts had expected.
The figures put the focus on how quickly SpaceX can generate returns from its AI buildout. CNBC reported that the company is positioning itself as a cloud-computing provider by renting out capacity built with Nvidia chips. An earnings call is where company leaders discuss reported results and their outlook with analysts, and SpaceX executives used Tuesday’s call to address the spending concern.
Chief Financial Officer Bret Johnsen said the company had deployed capital efficiently and that its AI-compute investments were achieving a payback period of less than one year, according to CNBC. That is management’s estimate of expected returns, rather than a completed financial result.
Which SpaceX businesses made money in the quarter?
Connectivity, the segment that includes Starlink, generated $4.29 billion in revenue and $1.66 billion in operating income during the quarter, CNBC reported. The AI unit brought in $2.56 billion of revenue but recorded a $1.26 billion operating loss. SpaceX’s space segment reported $962 million in revenue and a $542 million operating loss.
Those segment results help explain why spending drew attention despite the headline revenue beat. CNBC reported that connectivity was SpaceX’s only profitable segment last year, while the company continues to invest in AI and its launch operations.
CEO Elon Musk also said SpaceX had moved its internal target for $1 trillion in annual revenue forward to 2030 from 2031, CNBC reported. The goal is a management projection. CNN said FactSet estimates SpaceX revenue of about $207 billion in 2029.
A separate near-term factor is the end of the company’s post-IPO lock-up period, scheduled to begin August 6. CNBC and Reuters reported that the expiration would allow insiders and early investors to sell some shares, potentially increasing the stock’s available supply. The selloff coincided with investor questions reported by CNBC and Reuters about spending levels, funding and the timing of returns from AI infrastructure.
This story draws on original reporting from CNBC.
