SpaceX Reports First Earnings as Public Company Amid Stock Decline and AI Investment Concerns

SpaceX reported second-quarter results following its debut as a public company, revealing massive capital expenditures tied to artificial intelligence initiatives that have overshadowed traditional launch revenue. The aerospace manufacturer's stock has declined significantly since its June launch, with market concerns centering on whether aggressive AI spending will generate sustainable returns.

The Earnings Landscape

SpaceX disclosed capital expenditures of $10.1 billion during the first three months of the year, with artificial intelligence expenses accounting for $7.7 billion of that total. Analysts project second-quarter capital spending to reach approximately $13.2 billion. The company recorded a net loss of $4.9 billion in the previous fiscal year, largely attributed to investments in AI infrastructure following its merger with Musk's xAI in February.

For the current quarter, consensus estimates place revenue at $6.81 billion, up from $4.7 billion in the prior period. The company is expected to report an adjusted loss of $0.24 per share, with adjusted earnings before interest, taxes, depreciation and amortization of $2.0 billion.

Market Pressure and Investor Concerns

Since its market debut on June 12 at $150 per share, SpaceX stock has shed nearly 24 percent of its value, erasing approximately $500 billion in market capitalization. The shares have fallen roughly 50 percent from their intraday peak of $225.64 reached on June 16. Beyond current earnings, a significant headwind looms: the expiration of the lockup period on August 6 will free hundreds of millions of insider shares—roughly triple the current tradable float—potentially adding further downward pressure.

Analyst sentiment reflects growing unease. Phillip Capital issued a rare sell recommendation with a $75 price target, implying substantial additional declines from current levels. The core concern centers on the sustainability of SpaceX's investment thesis: whether the company's massive outlays for AI data centers and computing infrastructure will produce returns commensurate with the capital deployed. Projected capital expenditures are expected to increase from $48.7 billion in the current year to $118.4 billion by fiscal 2028, while debt is anticipated to grow more than fivefold from $41.7 billion to over $218 billion during the same period.

Revenue Sources and Business Segments

Starlink, the company's satellite internet service, remains the only consistently profitable segment and represents most of the year's revenue. The connectivity service generates income through direct consumer sales as well as contracts with government and military agencies. The traditional launch business, despite securing substantial NASA contracts, currently operates at a loss. SpaceX's merger with xAI brought data centers, Grok AI models, a chatbot service, and ownership of social network X into the corporate portfolio. The company also agreed to acquire Cursor AI for approximately $60 billion, with the transaction expected to close in the third quarter.