SpaceX shares dropped in premarket trading after the company's first earnings report as a public firm showed capital expenditures jumping sixfold, most of it aimed at AI infrastructure. The spending surge overshadowed a quarter that beat analyst expectations, and it lands days before insiders become free to sell a portion of their shares.
SpaceX shares fell more than 10% in premarket trading on Wednesday, a day after the space and AI company posted its first earnings report since going public. The drop came even though the quarter beat expectations, because investors focused on how much SpaceX is now spending on artificial intelligence rather than on the beat itself.
AI spending drives a sixfold jump in capex
SpaceX's capital expenditures jumped sixfold to $18.4 billion in the second quarter, with most of the money going toward AI infrastructure. The company is using that investment to build computing capacity with Nvidia chips that it plans to rent out as a cloud alternative, even though its own AI models are seen as behind OpenAI and Anthropic.
Chief Financial Officer Bret Johnsen tried to reassure investors that the spending was disciplined. According to CNBC: "we're getting less than a one-year payback," he said of the company's AI compute spending. Even so, the company narrowed its losses in the quarter and pointed to a bigger long-term payoff.
Revenue beats forecasts but doesn't calm nerves
SpaceX's quarterly revenue nearly doubled to $7.8 billion, well above analysts' estimates of $6.82 billion, according to the Financial Times. Musk pointed to Starlink, the only part of the business currently making a profit, which brought in $1.6 billion in revenue during the second quarter, according to BBC.
Musk also said SpaceX would hit $1 trillion in annual revenue in 2030 versus a previous forecast of 2031, as he tried to allay investor fears over the capex figure.
Lock-up expiration and short bets add pressure
SpaceX also faces the expiration of its insider share lock-up on Thursday, which will let insiders sell a portion of their shares for the first time. Those shares stem from the company's initial public offering earlier this year. Short interest in the stock has climbed to the equivalent of 220 million shares, or roughly 34% of the shares that are freely trading, according to data provider S3 Partners cited by the Financial Times.
Steve Westly, a former Tesla board member, told CNBC that investors still want to know how big the AI costs will get before the business turns a profit.
Sources: CNBC, BBC News, Financial Times
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