SpaceX's first quarterly earnings report as a public company revealed that AI-related capital expenditures surged, causing investor apprehension. For the quarter ending in June, AI spending reached $15.8 billion, exceeding expectations of $13.09 billion and nearly doubling from the previous quarter. This AI spending constituted the majority of SpaceX's total capital expenditures of $18.4 billion for the quarter. In the January-March quarter, AI expansion consumed $7.72 billion, representing about three-quarters of the company's total capital spending.
Despite the high AI costs, SpaceX reported strong revenue growth, with second-quarter revenue reaching $7.8 billion, up 92% from $4.1 billion a year earlier, and surpassing the $6.9 billion consensus estimate. The company also beat analyst expectations for its loss per share, reporting a loss of 9 cents compared to an anticipated 26 cents. Starlink subscriptions doubled from 6 million to 12 million, and AI revenue grew over 350% to $2.6 billion, primarily from deals to provide compute services to other AI companies like Anthropic and Google. Elon Musk stated that SpaceX expects to receive a "significant percentage" of Nvidia's sought-after GPUs next year.
The report led to a volatile market reaction. SpaceX shares initially surged 9% during regular trading hours but then fell 6.5% after the closing bell. The company's stock has pulled back sharply since its record-breaking IPO in June, with an initial valuation of $86 billion, as investors questioned whether its lofty valuation of 77 times expected revenue is sustainable amidst rising AI spending. Analysts like Will Rhind of GraniteShares voiced concerns that Starlink's profits might not be sufficient to fund a projected $30 billion annualized AI capital expenditure program.
Adding to investor jitters, a lockup period for 911 million shares expired, making those shares eligible for sale on the open market. This anticipated unlocking of shares, combined with concerns over the pace of AI spending, has put additional pressure on the stock. While the company's overall net loss narrowed to $143 million, the significant capital outlay for AI and space ventures, particularly Starship development, remains a key focus for investors scrutinizing the company's financial sustainability and growth strategy.
