SpaceX's stock plunged by 12% following its inaugural public earnings report, which indicated a significant increase in capital expenditures. These expenditures soared sixfold to $18.4 billion in the second quarter, significantly exceeding analyst estimates of $13.22 billion. The vast majority of this spending, over 80% or nearly $16 billion, was directed towards artificial intelligence, an area where SpaceX is attempting to catch up to competitors like OpenAI, Anthropic, and Google.
Despite the substantial increase in capital expenditure, SpaceX reported strong revenue growth, with a 92% jump from the previous year. Company CFO Bret Johnsen attempted to reassure investors, stating that the AI investments are expected to yield a payback in less than a year. He also projected that the company is on track to achieve $100 billion in annualized recurring revenue by year-end, contingent on the $60 billion Cursor acquisition.
However, the lavish AI spending unnerved investors, leading to a 7.5% after-hours drop in shares, wiping out earlier gains and leaving the stock more than 20% below its June 12 IPO price of $135. Analysts expressed concern over the aggressive spending, especially given SpaceX's relatively nascent position in the AI market compared to established players. The stock closed just over $125 on Tuesday, below its IPO price, and was down 12% in premarket trading on Wednesday.
