SpaceX Spends $15.8 Billion on AI in First Public Earnings as Stock Tumbles Despite Revenue Surge

Breakingviews - SpaceX preps to separate financial booster rocket

NEW YORK, August 4 (Reuters Breakingviews) - SpaceX (SPCX.O), opens new tab can catch a falling rocket. Its tumbling stock price is another matter. After a meteoric IPO pop, the $1.7 trillion satellites-to-chatbots concern has seen its shares tumble 16% below the $150 their initial opening price. Its first-ever earnings report as a public company, unveiled on Tuesday, offers strong topline growth. Yet that rise is powered by the booster rocket of big, one-off deals. The hand-off to more sustainable propulsion awaits. The company's artificial intelligence division, xAI, drives most of the hype. SpaceX has said that enterprise applications and other AI services account for 90% of its addressable markets. It spent nearly $16 billion on capital expenditures to develop its colossal server racks, even as the unit recorded an ⁠operating loss of $1.3 billion. Impressively, xAI more than tripled revenue year-over-year to $2.6 billion. Yet a future of serving up technically inferior Grok models or renting out spare computing power amid a perhaps-temporary shortage seems questionable. Major deals to provide server grunt to Anthropic and Alphabet (GOOGL.O), opens new tab are a huge fillip. They may not be repeatable. SpaceX's satellite broadband division, Starlink, should be more durable. Revenue grew 66% to $4.3 billion and operating profit hit $1.7 billion. Long-term growth is more uncertain, given that earthbound connections will probably remain faster, cheaper, and easily available for most of the world's population. SpaceX's rocket business, then, is the company's true core. Second-quarter operating loss of $542 million is somewhat misleading: its relatively cheap orbital launches make Starlink possible. The division carried 80% of all mass humans put into space in ⁠the quarter, SpaceX reckons. Analysts at MoffettNathanson estimate the company charges itself $15 million per trip, compared to $70 million for outside customers. If Starlink paid market rates, the rocket division would have made $12.6 billion of revenue last year, rather than $4.1 billion. Getting the ever-delayed, gigantic Starship rocket operational would help lower costs and improve margins. Get cheap enough, and truly off-the-wall science projects, like low-gravity semiconductor, opens new tab or drug manufacturing, opens new tab, might even become conceivable. ⁠SpaceX needs such diversification: 82% of its cargo came from Starlink this quarter. Of course, corporate and geopolitical rivals will not want one company - especially one controlled by the opinionated Musk - to dominate space. If the orbital economy takes off, they may try to loosen his grip. ⁠And all of this remains conditional on solving incredibly difficult engineering problems. At least SpaceX's narrowing overall operating loss makes the spending required to hit its wildly ambitious goals seem ever-so-slightly more plausible. It still has light-years to go. Follow Robert Cyran on Bluesky, opens new tab. CONTEXT ⁠NEWS SpaceX said on August 4 that it generated $7.8 billion in revenue in the second quarter, compared to $4.1 billion for the same period a year prior. Revenue in its connectivity division, which houses satellite broadband business Starlink, grew 66% to $4.3 billion, while the AI unit's top line more than tripled to $2.6 billion. Editing by Jonathan Guilford; Production by Pranav Kiran * Suggested Topics: * Breakingviews * BRVF Breakingviews Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time. Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on X @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors. Robert Cyran Thomson Reuters Robert Cyran, U.S. tech columnist, joined Breakingviews in London in 2003 and moved four years later to New York, where he continues to cover global technology, pharmaceuticals and special situations. Robert began his career at Forbes magazine, where he assisted in the startup of the international version of the magazine. Before working at Breakingviews he worked as a market researcher and reporter covering the pharmaceutical industry. Robert has a Masters degree in economics from Birmingham University and an undergraduate degree from George Washington University.

SpaceX's AI spending unnerves Wall Street despite promises of quick payoff

Capital expenditures jumped more than sixfold from a year eariler. After SpaceX spent way more on its AI buildout than analysts expected, executives tried to convince investors on Tuesday that it's all worthwhile, claiming that the company is making its money back within a year. The message didn't resonate, as SpaceX shares sank following the company's first earnings report since its IPO in June. While revenue in the second quarter sailed past estimates, jumping 92% from a year prior, capital expenditures soared over sixfold to $18.4 billion, more than double total sales for the quarter. Well over 80% of SpaceX's capex went towards artificial intelligence, where the company is way behind OpenAI, Anthropic and Google when it comes to models and services, and where it's now trying to compete against cloud giants Microsoft, Amazon and Google by selling compute capacity. The capex figure exceeded the $13.22 billion average analyst analyst estimate, according to FactSet. The stock's 7.5% after-hours dropped mostly wiped out its gains from earlier in the day and left the shares more than 20% below the first trade on June 12. Bret Johnsen, SpaceX's CFO, suggested on the earnings call that investors should start thinking differently about capex because of how quickly it's converting into revenue. "We have been very efficient, to date and I think we'll continue to be," Johnsen said. "On the AI compute side, we're able to deploy capital in such a way that we're getting less than a one-year payback." Days before its record IPO, SpaceX inked a deal with Google that will bring in up to $920 million a month by providing AI compute capacity to the search giant. Prior to that, Anthropic announced a deal that would involve paying up to $1.25 billion a month for three years for compute capacity at SpaceX's Colossus data center in Memphis, Tennessee. And SpaceX has a separate agreement to provide computing power to Reflection AI for up to $150 million a month. Johnsen said that in the first few weeks of the current quarter, SpaceX contracted $6.7 billion of cloud services revenue "over a six-month period that begins ramping starting in October." Add it up, and the company is on pace to reach $100 billion in annualized recurring revenue by the end of the year, Johnsen said, noting that his numbers assume closure of the $60 billion Cursor acquisition. In 2025, SpaceX's total revenue came in at below $19 billion. SpaceX CEO Elon Musk said investors can take the 2026 target to the bank. "To be clear, the $100 billion ARR in December is not a question mark," Musk said. "That's what we would achieve if we basically did nothing." SpaceX addressed Wall Street for the first time during a period of heightened scrutiny surrounding AI spending as tech outlays reach into the stratosphere. Alphabet and Amazon could each spend over $200 billion this year, with Microsoft and Meta not too far behind. Companies are watching their cash piles dwindle, betting that all these upfront investments on data centers and costly AI systems from the likes of Nvidia will be profitable in the long run. The particular challenge for SpaceX, which entered the AI market in February through its merger with Musk's xAI, is that reselling AI capacity for short-term revenue is a strategy that's detached from the company's broader ambitions. The company said in its IPO prospectus that its "dual monetization strategy provides multiple pathways to generate returns on invested capital." Musk wants to be an AI pioneer through some combination of his company's Grok model and eventually by building data centers in space. The deals with Anthropic, Google and Reflection indicate that SpaceXAI, as the AI business is now known, built way more capacity at its mammoth data centers in Memphis than it's able to put to use. Musk said on the call that the company has a "series of projects" that cumulatively come to 20 gigawatts of capacity, including power and cooling, by the end of next year. "Some of them won't pan out exactly on time, but I would expect that we'd still probably have, at the power plant level, something close to 15GW," Musk said. There are also potential legal headwinds. SpaceXAI has been sued for using natural gas-burning turbines to power its facilities in Memphis without first installing pollution controls and obtaining federal permits. In its quarterly filing, SpaceX said it's recorded an accrual of $354 million for "litigation losses that are probable." To this point, SpaceX's AI business has been bleeding cash. In the second quarter, the unit generated $2.56 billion in revenue and had a $1.26 billion operating loss. That followed a $2.47 billion loss in the first quarter on $818 million in revenue. The company is trying to change the narrative with the new cloud agreements that Johnsen said helped deliver "significant margin expansion" in the quarter. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

SpaceX's first public earnings statement shows the financials of an AI company in 2026 - Engadget

SpaceX has published its first earnings report since going public on June 12. The company's Q2 topline is broadly positive. As a whole, SpaceX increased revenue by 92 percent year-over-year, bringing its total revenue for the quarter to $7.8 billion. The company also shaved the gap between its revenue and operating expenses by more than half, reducing net losses to $541 million, down from $1 billion a year ago. But digging deeper, the financials reveal just how expensive is to run an AI company. Over the past three months, the division previously known as xAI generated $2.56 billion in revenue, an increase of 247 percent from $737 million one year ago. SpaceX attributes that increase primarily to "Cloud Services Agreements" like the highly publicized deals with Anthropic and Google to use its data centers. The company also managed to cut its operating loss to $1.25 billion, down from $1.54 billion. However, SpaceX significantly ramped up CapEx spending. Year over year, that number increased by a whopping 2,013 percent to $15.8 billion for the quarter. For context, the rocket launch part of SpaceX's business by comparison spent a paltry $1.17 on maintaining and improving its fixed assets. While we had an idea of just how expensive it was to run an AI company thanks to reporting from people like Ed Zitron, SpaceX's financials give us our first definitive look at the inside of an AI startup. And keep in mind this is all coming from the company that many consider the fourth horse in the AI race behind Anthropic, Google and OpenAI. Further complicating those numbers is that Anthropic has agreed to pay $1.25 billion per month through May 2029 to use SpaceX's Colossus 1 data center for its compute needs. It will be interesting to see how SpaceX's Cursor acquisition affects the AI division's bottom line when that deal closes sometime this quarter.

SpaceX Stock Drops After First Earnings Call as Musk Fails to Woo Investors With AI Goals

Elon Musk's SpaceX spent an eye-watering $18.4 billion in its first quarter as a publicly traded company and warned investors to expect similarly high spending in the next two financial quarters, sending the stock price down more than 8% in late trading on Tuesday evening. A whopping $15.8 billion of that spending was to power its artificial intelligence efforts, a division that ended the quarter with a $1.3 billion net operating loss. The figure comes from the company's first earnings report since the record-setting initial public offering hit the market in mid-June. Although the IPO was surely an amazing day for Musk, who briefly became the world's first trillionaire, things have not been all peachy since then, with the stock price currently well below its IPO price. As of last week, the company's stock was so far down from its IPO highs that the value it shed was roughly equal to Musk's other company, Tesla's, market capitalization. Tuesday's stock sales are unlikely to help that scenario, and neither is the fact that the company's first lockup period ends on Thursday, meaning some company insiders will be able to sell more than $100 billion worth of stock for the first time since SpaceX went public. To ease some of those worries, Musk promised dramatic AI advancements. "Our rate of growth certainly is faster than anyone else, and our efficiency of compute deployment I think is also the highest," Musk claimed. "So we expect to end this year with over two gigawatts of compute, and probably our cumulative compute online by the end of next year will be several times higher." Those compute plans are ambitious, but Musk struck a defiant tone against any doubters in the earnings call on Tuesday. "The terrestrial data centers are a trivial problem compared to making gigantic reusable rockets which are launched frequently," Musk said. Musk said SpaceX's data centers will be exclusively built on Nvidia chips. The two companies are also partnering to build Starmind AI satellites, a part of SpaceX's even more ambitious plan to put a giant colony of up to a million AI data centers in Earth's orbit. Some experts are hesitant that Musk and his company will be able to pull off the space-based data center colony plan, while many have also raised concerns about the environmental, economic, and social impact of such a huge launch program if it does pan out as promised. On the call, Musk said that SpaceX would begin launching the Starmind AI satellites in 2027. The company will also be unveiling Grok 5 before the end of the year, which Musk said would be trained on "all the data that SpaceX has ever produced," making the chatbot "by far the best engineer." Musk has previously claimed the yet-to-be-unveiled LLM will be AGI-level, aka a contested hypothetical AI that would theoretically equal or beat all human capabilities. "We expect the cadence of AI development to improve dramatically," Musk said. "I think, by the end of next year, it's not clear to me that there's anything digital at least that AI won't be able to do based on the current rate of improvement." All of this comes with a huge, obvious caveat: Musk has long had a penchant for overpromising. His hefty promises extended beyond the AI sphere on Tuesday as well, with the CEO claiming that the company's space business would be launching a rocket a day by next year and that there will be robots working in manufacturing operations on the literal Moon. "I know this sounds totally nuts, but you can probably scale to a thousand times the economy of Earth in terms of intelligence launched to space, but probably maybe even a million times," Musk claimed. "We're going to build the factories on the Moon; the robots will be helpful with that.

SpaceX quarterly revenue surges in debut results on strong growth in its Starlink business

Aug 4 (Reuters) - SpaceX (SPCX.O), opens new tab reported on Tuesday a 92% rise in revenue for the April-June quarter, in its first earnings since going public, buoyed by strong growth in its Starlink satellite-internet and AI businesses. It reported revenue of $7.8 billion, compared with $4.1 billion a year earlier. Second-quarter revenue beat expectations of $6.93 billion, according to LSEG data. The company posted a net loss of $541 million attributable to shareholders for the three months ended June 30. The company said it invested $18.37 billion in AI infrastructure, Starship and Starlink expansion. The company's stock has declined 8% since its record-breaking initial public offering in June that valued the company at about $1.75 trillion. The stock could face additional pressure from the expiry of SpaceX's post-IPO lock-up period starting on Thursday, which may unleash a wave of insider and early-investor shares on the market. Starlink and SpaceX's broader connectivity operations remain the company's primary financial engine, underpinning CEO Elon Musk's push to build an AI-first business ⁠that extends beyond renting compute capacity to developing frontier models, consumer and enterprise software, and, eventually, data centers in space. The company's satellite-internet unit has continued to expand its global subscriber base, aided by launches of additional satellites and a growing range of consumer, enterprise, aviation, maritime and government services. But that expansion has come with tradeoffs: average revenue per user (ARPU) has dropped as SpaceX has entered more international markets and rolled out lower-priced plans. Investors are watching whether SpaceX can maintain growth while improving the economics of its network, particularly as it spends heavily to expand coverage, increase capacity and develop direct-to-device mobile services. SpaceX's AI business, which includes xAI, Grok, and social-media platform X, and a rapidly expanding data center operation, has been its biggest area of investment. The business is generating revenue from compute contracts with Anthropic, Alphabet's Google and Reflection AI, though a portion of its recurring revenue has yet ⁠to be recognized. Operating losses at the AI business have mounted, and SpaceX has cautioned that the AI unit will require sustained investment before it can generate profits consistently. Starship, SpaceX's next-generation reusable rocket system, is yet to enter commercial service but is expected to enable deployment of higher-bandwidth Starlink satellites and orbital AI-computing infrastructure. The company's ability to turn Starship into a reliably reusable vehicle is central to its longer-term strategy. Investors have closely watched for updates on testing progress, launch cadence, reusability ⁠milestones and the vehicle's satellite-deployment capabilities. Separately, SpaceX said that it had partnered with Nvidia (NVDA.O), opens new tab to use its chips in the Starmind AI1 orbital compute satellites. The space segment, which includes commercial launches, government missions and development of Starship remains a significant source of costs and uncertainty. While launch activity for Falcon -- SpaceX's partially reusable workhorse rocket -- has ⁠remained robust, revenue can vary with the mix of internal Starlink deployments, commercial customer missions and government contracts. In recent years, SpaceX has increasingly prioritized launches for its own satellite network over third-party payloads, while continuing to absorb significant costs tied to Starship's development. Investors will also be keen to hear Musk's ⁠comments on a potential merger between SpaceX and Tesla (TSLA.O), opens new tab after a Wall Street Journal report last week that executives at his electric-vehicle company had been told to prepare for a separation of its China business ahead of a potential deal. Musk dismissed the report as "fake news," but he had previously declined to rule out the possibility, citing growing overlap between the companies. Reporting by Akash Sriram in Bengaluru; Editing by Sriraj Kalluvila Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence * ADAS, AV & Safety * Software-Defined Vehicle * Sustainable & EV Supply Chain

SpaceX tops revenue expectations in first earnings report after IPO

Why it matters: SpaceX has been under the microscope -- with shares falling below their IPO price of $135 -- as investors look for Elon Musk to deliver AI advancements. Driving the news: SpaceX's revenue soared 92%, to $7.81 billion, in the period ended June 30, compared with a year earlier, topping S&P Visible Alpha expectations of $6.9 billion. That included: * $4.29 billion in its connectivity division, which includes the Starlink satellite internet service, up 66% from a year earlier. * $2.56 billion in AI revenue, which includes xAI and Grok subscriptions, up 247%. * $962 million in space revenue, up 29%. Zoom in: SpaceX shares had been suffering in recent weeks amid concerns about an AI bubble. They remain below June's IPO and far below Wall Street's consensus target price of $293, according to S&P Visible Alpha. * "The weakness has been partially driven by concerns about overgrowth around AI and data centers," according to Melissa Otto, head of Visible Alpha Research. "There is increasing concern in the market that AI infrastructure investments will not be able to generate a return in line with the level of cash needed." What to watch: How quickly SpaceX burns through its $100 billion stockpile of cash and marketable securities, plus how quickly it can fulfill its $47.5 billion order backlog. * The company's net loss fell from $1 billion a year ago to $541 million in the period ended June 30. * The company is projecting a 99% decline in the cost to orbit as it invests heavily in its Starship rocket program. * "This financial strength gives us substantial capacity to invest in Starship, Starlink Broadband and Mobile satellites, and our AI platform, while maintaining a disciplined long-term capital allocation framework," SpaceX chief financial officer Bret Johnson said in a statement. What's next: On the earnings call, Musk said that SpaceX would build out its data centers exclusively with Nvidia chips: "We've decided to build exclusively on Nvidia because we think the Vera Rubin is the best architecture. We think it's the best AI computer and we greatly value our close cooperation."

SpaceX's first results put Musk's AI spending under Wall Street microscope

August 3 (Reuters) - SpaceX's (SPCX.O), opens new tab first earnings report since its record-breaking IPO will provide an early gauge of whether Starlink's profits can sustain the company's rapidly growing spending on AI and space ventures. Due after the market closes on Tuesday, the results will give SpaceX's limited pool of public investors their first chance to judge whether the financial case behind the company's lofty valuation supports CEO Elon Musk's vision of a powerhouse spanning AI, space and telecommunications. Musk has pitched AI as SpaceX's future growth engine, with ambitions extending beyond renting compute capacity to other companies to developing frontier models, consumer and enterprise software, and, eventually, data centers in space. But until its AI business and Starship launch operations can stand on their own, Musk plans to use Starlink's profits to bankroll both ventures, a strategy critics argue is unsustainable. "Starlink is executing beautifully, but it cannot single-handedly fund a $30 billion annualized AI capex program," said Will Rhind, founder and CEO of GraniteShares, an asset manager that offers ETFs tied to SpaceX stock performance. Analysts expect the AI business to nearly triple to $2.33 billion in the April-June quarter, up sharply ⁠from 12.5% growth in the prior quarter, according to LSEG-compiled data. Starlink growth is also expected to accelerate to 52.6% from 31.6%, driven mainly by expansion into more countries. SpaceX's AI expansion consumed $7.72 billion in the January-March quarter, accounting for about three-quarters of the company's total capital spending. Analysts expect SpaceX to report capital expenses of nearly $14.05 billion in the April-June quarter. Capital spending in the AI segment is expected to surge more than six times to $10.2 billion from the same period last year, according to Visible Alpha data. SpaceX shares have pulled back sharply since the company's $86 billion IPO in June, as investors questioned whether its lofty valuation of 77 times expected revenue can be justified. The stock could face additional pressure from the expiry of SpaceX's post-IPO lock-up period starting August 6, which may unleash a wave of insider and early-investor shares on the market. Investors will also be keen to hear Musk's comments on a potential merger between SpaceX and Tesla (TSLA.O), opens new tab after a media report emerged last week that executives at his EV company had been told to prepare for a separation of its China business ahead of a potential deal. Musk dismissed the report as "fake news," but he had previously declined to dismiss the possibility, citing growing ⁠overlap between the companies. COMPUTE REVENUE IN FOCUS Analysts expect revenue from connectivity (Starlink) of $3.82 billion and operating profit of $1.42 billion in the second quarter ended June 30. In the first quarter, operating profit was $1.19 billion. At the end of March, Starlink had 10.3 million subscribers, roughly double the level a year earlier, though average revenue per user fell nearly 25%. SpaceX has signed AI compute agreements with customers including Anthropic, Alphabet's (GOOGL.O), opens new tab Google and Reflection AI, but that may not be enough. "The key question for investors is whether SpaceX can monetize its AI infrastructure through third-party compute fast enough to offset xAI's extraordinary capital intensity," said Michael Monaghan, portfolio manager of the Founders 100 ETF (FFF.Z), opens new tab, which ⁠holds SpaceX shares. MoffettNathanson analyst Julie Zhu expects SpaceX's AI business to generate positive core profit this year, helped by infrastructure agreements, although she said the gains would be tempered by the segment's significantly higher capital spending requirements. "This is not going to be a free cash flow story now, soon, or maybe even ever," said Bill Birmingham, managing director at REX Financial, which offers ETFs tied to SpaceX stock. For the whole company, analysts expect SpaceX to ⁠report second-quarter revenue of about $6.93 billion and loss before interest and taxes of $1.55 billion. STARSHIP REMAINS KEY Many investors still view Starship as SpaceX's most important asset and the key to Musk's long-term vision, underpinning plans to expand Starlink, land astronauts on the moon for NASA by 2028 and eventually deploy AI-processing satellites in orbit. Last month, Starship successfully deployed the first upgraded Starlink V3 satellites after its 13th test flight, ⁠but the Super Heavy booster fell short of a controlled splashdown. Analysts expect SpaceX's launch business to generate $871.4 million in second-quarter revenue, while posting an operating loss of $773 million. In the January-March quarter, operating loss surged ninefold from a year earlier, and revenue fell 28.4% to $619 million. "The progress on Starship is essential for demonstrating to investors that the company is on the desired trajectory," said Micah Walter-Range, a space industry specialist who helped develop the index tracked by the Procure Space ETF (UFO.O), opens new tab. Reporting by Akash Sriram in Bengaluru; Editing by Sayantani Ghosh and Anil D'Silva Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Autos & Transportation * Capital Markets * ADAS, AV & Safety * Software-Defined Vehicle * Sustainable & EV Supply Chain Akash Sriram Thomson Reuters Akash reports on technology companies in the United States, electric vehicle companies, and the space industry. His reporting usually appears in the Autos & Transportation and Technology sections. He has a postgraduate degree in Conflict, Development, and Security from the University of Leeds. Akash's interests include music, football (soccer), and Formula 1.

SpaceX hit by surging AI costs as insiders prepare to sell their shares

Elon Musk, founder of Space Exploration Technologies Corp. (SpaceX), on screen during the company's initial public offering at the Nasdaq MarketSite in New York in June. Adam Gray / Bloomberg via Getty Images file For a rocket company, SpaceX is spending a lot of money to build out its AI capacities. Too much, according to investors. The company reported revenues and earnings in its first-ever quarterly update as a public company that the surpassed analysts' expectations. Most of its revenues came from its Starlink satellite offering. But investor focus turned to capital expenditures related to its xAI unit, which runs the Grok AI service. Those hit $15.8 billion, higher than expectations of $13.09 billion, according to Bloomberg News data. The spending also comprised most of SpaceX's overall $18.4 billion quarterly spending on cap-ex. The report caused SpaceX shares to reverse a healthy run-up during regular trading hours Tuesday. The stock fell some 5% in trading after the closing bell, after having surged 9% earlier. SpaceX immediately became a multi-trillion-dollar company after a record-setting IPO on June 12 -- but nearly just as quickly, it erased $1 trillion in value as the stock plunged amid anticipation of insider stock sales and broader jitters about the pace of AI spending. Still, the company continues to enjoy a market valuation of more than $1 trillion, making it one of the most valuable companies in the world. The stock got an additional boost Tuesday after announcing a new deal with Nvidia that will see it provide SpaceX with additional computing power. Investor speculation has grown that SpaceX may attempt to merge with its sister company, Tesla. This would give Elon Musk even more control over his multi-faceted technology empire than he already exerts.

SpaceX revenue jumps 92% in first earnings report

San Francisco (United States) (AFP) - SpaceX's revenue jumped 92 percent in the second quarter, beating analyst expectations by around $1 billion in its first earnings report since going public in June, the company announced Tuesday. AI computing deals and Starlink satellite growth fueled the results, the company said in a statement. But it also continued to spend heavily, with capital expenditures exceeding $18 billion in the three months ending in June. More than 86 percent of that spending went to its artificial intelligence division. Starlink's satellite connectivity service grew to 12 million subscribers, doubling from a year earlier. The company reduced its net loss to $541 million. During a call with analysts Tuesday afternoon, CEO Elon Musk and COO Gwynne Shotwell both sought to reassure investors that SpaceX is successfully evolving from being primarily a rocket company into a conglomerate with AI at its core. SpaceX shares dropped more than 7 percent during after-hours trading. Investors remain skeptical even with SpaceX beating expectations, Emarketer Senior Analyst Gadjo Sevilla told AFP. "I don't think people want to hear promises about the next five years or a mission to Mars," Sevilla said. "Everyone knows that will take time. They want to see how the value can be turned around as quickly as possible."

Rockets, Starlink, AI: SpaceX faces its first Wall Street grilling

San Francisco (United States) (AFP) - Less than two months after a record-breaking IPO, SpaceX is set to publish its first quarterly results after markets close on Tuesday, as the share price of Elon Musk's rocket ship and AI company has lost around half its value since peaking in June. With a market valuation hovering around $1.5 trillion, the company must prove that it can, in the long run, turn its various promises -- dominating artificial intelligence, creating data centers in space, colonizing Mars -- into profits for investors. Failing to deliver on those promises would reach far beyond Wall Street; SpaceX was added to the Nasdaq 100 in July, which means it is now embedded in the retirement savings of millions of Americans. For now, no one is expecting profits from its current quarter, which ended in June. Analysts on average expect a loss of $1.9 billion on revenue of $6.8 billion in SpaceX's second quarter, but that loss is around a 50 percent improvement compared to the previous quarter. SpaceX could also break even by the end of September. That improvement is thanks, in particular, to the mega-contract signed with AI lab Anthropic, which since July has been paying $1.25 billion dollars a month to use SpaceX's Colossus data center near Memphis, Tennessee. Above all, Tuesday's results will show the extent of SpaceX's evolution from being primarily a rocket company to a conglomerate with AI at its core. Rocket launches, historically the core of SpaceX's business, now account for only a fifth of its revenue and lose money. Starlink, its satellite internet business, provides more than half of revenue and remains the only profitable segment. But the AI division -- which encompasses the social network X, the Grok conversational robot, and data center leasing -- is expected to become the group's leading source of revenue as early as the current quarter. Because in addition to Anthropic, Google is preparing this fall to pay SpaceX $920 million a month to use its computing power, and the startup Reflection AI has signed a similar deal. SpaceX thus rents out its machines to its own competitors as its AI model Grok struggles to gain commercial traction against OpenAI's ChatGPT and Anthropic's Claude. These contracts, however, can be terminated with just three months' notice. Google itself describes its deal as short-term "backup capacity." "AI is the growth story but rests on computer contracts that expire by end-2029," Phillip Securities, one of the few firms to recommend selling the stock, said in an analyst note. - Merger with Tesla? - Another closely watched issue: spending. For every dollar it takes in, SpaceX invests nearly two, both in its data centers and in Starship, its mega-rocket still in testing and on which a large part of the whole business depends. The group is expected to keep burning tens of billions of dollars in cash for at least three more years, according to observers. Uncertainty will also linger this week until a lockup period expires on Thursday, allowing a portion of SpaceX employees to sell their shares post-IPO. That could more than double the already limited number of shares in circulation, which currently sits at around 5 percent. "We believe the quarterly results should not matter," analysts at the firm Bernstein said in a note. Rather, it will be Musk's remarks that will move the stock, depending on what he says about capital expenditures, a potential $60 billion-dollar buyout of AI startup Cursor or even a rumored merger with his carmaker Tesla.

US stocks: SpaceX quarterly revenue surges in debut results on strong growth in its Starlink business

SpaceX has announced an impressive 92% increase in revenue for the latest quarter, primarily fueled by the growth of Starlink and its AI initiatives. Despite this surge, the firm faced a net loss due to significant capital allocated towards infrastructure and future projects. After a strong IPO, its stock is now under scrutiny, especially with the impending lock-up expiration. SpaceX reported on Tuesday a 92% rise in revenue for the April-June quarter, in its first earnings since going public, buoyed by strong growth in its Starlink satellite-internet and AI businesses. It reported revenue of $7.8 billion, compared with $4.1 billion a year earlier. US MarketsPowered By As on 05 Aug 2026, 01:12 AM IST S&P 500 Top Gainers Palantir Technologies162.60(29.41%) Zebra Technologies365.35(25.27%) Gartner187.59(23.79%) Intel100.75(10.71%) Gainers" S&P 500 Top Losers NRG Energy114.49(-17.32%) Aptiv47.76(-16.56%) Coterra Energy32.56(-8.62%) Chipotle Mexican Grill34.29(-8.48%) Losers" Second-quarter revenue beat expectations of $6.93 billion, according to LSEG data. The company posted a net loss of $541 million attributable to shareholders for the three months ended June 30. The company said it invested $18.37 billion in AI infrastructure, Starship and Starlink expansion. The company's stock has declined 8% since its record-breaking initial public offering in June that valued ⁠the company at ⁠about $1.75 trillion. The stock could face additional pressure from the expiry of SpaceX's post-IPO lock-up period starting on Thursday, which may unleash a wave of insider and early-investor shares on the market. Starlink and SpaceX's broader connectivity operations remain the company's primary financial engine, underpinning CEO Elon Musk's push to build an AI-first business that extends beyond renting compute capacity to developing frontier models, consumer and enterprise software, and, eventually, data centers in space. The company's satellite-internet unit has continued to expand its global subscriber base, aided by launches of additional satellites and a growing range of consumer, enterprise, aviation, maritime and government services. But that expansion has come with tradeoffs: average revenue per ⁠user (ARPU) has dropped as SpaceX has entered more international markets and rolled out lower-priced plans. Investors are watching whether SpaceX can maintain growth while improving the economics of its network, particularly as it spends heavily to expand coverage, increase ⁠capacity and develop direct-to-device mobile services. SpaceX's AI business, which includes xAI, Grok, and social-media platform X, and a rapidly expanding data center operation, has been its biggest area of investment. The business is generating revenue from compute contracts with Anthropic, Alphabet's Google and Reflection AI, though a portion of its recurring revenue has yet to be recognized. Operating losses at the AI business have mounted, and SpaceX has cautioned that the AI unit will require sustained investment before it can generate profits consistently. Starship, SpaceX's next-generation reusable rocket system, is yet to enter commercial service but is expected to enable deployment of higher-bandwidth Starlink satellites and orbital AI-computing infrastructure. The company's ability to turn Starship into a reliably reusable vehicle is central to its longer-term strategy. Investors have closely watched for updates on testing progress, launch cadence, reusability milestones and the vehicle's satellite-deployment capabilities. Separately, SpaceX said that it had partnered with Nvidia to use its chips in the Starmind AI1 orbital compute satellites. The space segment, which includes ⁠commercial launches, government missions and development of Starship remains a significant source of costs and uncertainty. While launch activity for Falcon - SpaceX's partially reusable workhorse rocket - has remained robust, revenue can vary with the mix of internal Starlink deployments, commercial customer missions and government contracts. In recent years, SpaceX has increasingly prioritized launches for its own satellite network over third-party payloads, while continuing to absorb significant costs tied to Starship's development. Investors will also be keen to hear Musk's comments on a potential merger between SpaceX and Tesla after a Wall Street Journal report last week that executives at his electric-vehicle company had been told to prepare for a separation of its China business ahead of a potential deal. Musk dismissed the report as "fake news," but he had previously declined to rule out the possibility, citing growing overlap between the companies.

SpaceX's AI splurge puts a damper on debut earnings after IPO

SpaceX stock fell Tuesday after the company disclosed higher-than-expected spending on its artificial intelligence business, dampening an inaugural quarterly report that broadly surpassed Wall Street forecasts. Shares of entrepreneur Elon Musk's rocket, satellite and AI conglomerate tumbled as much as 8.8% in U.S. post-market trading after it said capital spending jumped to about $18.4 billion in the second quarter. "We expect the cadence of AI development to improve dramatically," Musk told analysts on a conference call after the company reported results that beat forecasts for revenue, AI losses and Starlink subscriber growth.

SpaceX's first results put Elon Musk's AI spending under Wall Street microscope

SpaceX is poised to reveal its next earnings report, signaling Starlink's profitability and its pivotal role in financing AI and space initiatives. Analysts predict notable advancements in Starlink and AI ventures for the April-June quarter. A key area of interest for investors is SpaceX's sizable investments in AI technology, while Starship's development is integral to the company's future aspirations and investor confidence. SpaceX's first earnings report since its record-breaking IPO will provide an early gauge of whether Starlink's profits can sustain the company's rapidly growing spending on AI and space ventures. Due after the market closes on Tuesday, the results will give SpaceX's limited pool of public investors their first chance to judge whether the financial case behind the company's lofty valuation supports CEO Elon Musk's vision of a powerhouse spanning AI, space and telecommunications. Musk has pitched AI as SpaceX's future growth engine, with ambitions extending beyond renting compute capacity to other companies to developing frontier models, consumer and enterprise software, and, eventually, data centers in space. But until its AI business and Starship launch operations can stand on their own, Musk plans to use Starlink's profits to bankroll both ventures, a strategy ⁠critics argue ⁠is unsustainable. "Starlink is executing beautifully, but it cannot single-handedly fund a $30 billion annualized AI capex program," said Will Rhind, founder and CEO of GraniteShares, an asset manager that offers ETFs tied to SpaceX stock performance. Analysts expect the AI business to nearly triple to $2.33 billion in the April-June quarter, up sharply from 12.5% growth in the prior quarter, according to LSEG-compiled data. Starlink growth is also expected to accelerate to 52.6% from 31.6%, driven mainly by expansion into more countries. SpaceX's AI expansion consumed $7.72 billion in the January-March quarter, accounting for about three-quarters of the company's total capital spending. Analysts expect SpaceX to report capital expenses of nearly $14.05 billion in the April-June quarter. Capital spending in the AI segment is expected to surge more than six times to $10.2 billion from the same period last year, according to Visible Alpha data. SpaceX shares have pulled back sharply since the company's $86 ⁠billion IPO in June, as investors questioned whether its lofty valuation of 77 times expected revenue can be justified. The stock could face additional pressure from the expiry of SpaceX's post-IPO lock-up period starting August 6, which may unleash a wave of insider and early-investor shares on the market. Investors will also be keen ⁠to hear Musk's comments on a potential merger between SpaceX and Tesla after a media report emerged last week that executives at his EV company had been told to prepare for a separation of its China business ahead of a potential deal. Musk dismissed the report as "fake news," but he had previously declined to dismiss the possibility, citing growing overlap between the companies. Compute revenue in focus Analysts expect revenue from connectivity (Starlink) of $3.82 billion and operating profit of $1.42 billion in the second quarter ended June 30. In the first quarter, operating profit was $1.19 billion. At the end of March, Starlink had 10.3 million subscribers, roughly double the level a year earlier, though average revenue per user fell nearly 25%. SpaceX has signed AI compute agreements with customers including Anthropic, Alphabet's Google and Reflection AI, but that may not be enough. "The key question for investors is whether SpaceX can monetize its AI infrastructure through third-party compute fast enough to offset xAI's extraordinary capital intensity," said Michael Monaghan, portfolio manager of the Founders 100 ETF, which holds SpaceX shares. MoffettNathanson analyst Julie Zhu expects SpaceX's AI business to generate positive core profit this year, helped by infrastructure agreements, although she said the gains would be tempered by the segment's significantly higher capital spending requirements."This is not going to be a ⁠free cash flow story now, soon, or maybe even ever," said Bill Birmingham, managing director at REX Financial, which offers ETFs tied to SpaceX stock. For the whole company, analysts expect SpaceX to report second-quarter revenue of about $6.93 billion and loss before interest and taxes of $1.55 billion. Starship remains key Many investors still view Starship as SpaceX's most important asset and the key to Musk's long-term vision, underpinning plans to expand Starlink, land astronauts on the moon for NASA by 2028 and eventually deploy AI-processing satellites in orbit. Last month, Starship successfully deployed the first upgraded Starlink V3 satellites after its 13th test flight, but the Super Heavy booster fell short of a controlled splashdown. Analysts expect SpaceX's launch business to generate $871.4 million in second-quarter revenue, while posting an operating loss of $773 million. In the January-March quarter, operating loss surged ninefold from a year earlier, and revenue fell 28.4% to $619 million. "The progress on Starship is essential for demonstrating to investors that the company is on the desired trajectory," said Micah Walter-Range, a space industry specialist who helped develop the index tracked by the Procure Space ETF.

SpaceX's first quarterly results as a public company beat expectations, but AI costs hit stock

NEW YORK, Aug 4 (Reuters) - SpaceX on Tuesday posted its first quarterly results as a public company, highlighting a 92% rise in revenue on strong growth in its Starlink satellite-internet and AI businesses. Revenue for the second quarter ended in June rose to $7.8 billion from $4.1 billion a year earlier, beating the $6.9 billion consensus estimate. The firm lost 9 cents a share, beating the 26-cent loss expected by analysts. Shares fell 4% in late trading on Tuesday after rising 9.4% in regular action. The report has been widely anticipated on Wall Street in part because the earnings release will be followed this week by the unlock of 911 million shares previously subject to restrictions -- an event that stands to add to the already significant pressure on the shares of Elon Musk's rockets-and-AI firm. SpaceX has risen more than 10% this week but remains below the $135-a-share price at which it raised $75 billion in June in the largest-ever public offering. The stock's decline means that an additional 455 million shares that could have been unlocked this week had SpaceX shares risen above certain stated thresholds will remain ineligible for release for now. COMMENTS: BRIAN MULBERRY, CHIEF MARKET STRATEGIST AT ZACKS INVESTMENT MANAGEMENT, GOLDEN, COLORADO: "The two things that stood out to me are the doubling of Starlink subscriptions from 6 million to 12 million...and then the actual AI revenue was up 350%. ... Those two numbers were absolutely the biggest outperforming data points. "I think that's a tremendous upside surprise today alone is the fact that AI is already monetizing itself. They're not relying on Starlink to fund operations there. I think that's a huge part of the story. "If they can continue to build on this number and continue to monetize AI directly, then it really does soften our concerns about the capex being a little bit too heavy. I think that this is one of those types of results that will change our thinking and might move up our scale in terms of when we want to take a position." ADAM SARHAN, CHIEF EXECUTIVE, 50 PARK INVESTMENTS, NEW YORK: "They made it very clear this is not a quarter-by-quarter play. Elon's mission is a long-term mission... it's perfectly normal to see fluctuations around highly anticipated IPOs within the first year, if not the first two years, of coming out and starting to trade. "Revenue jumped 92% but AI costs were high. But revenue jumped, so clearly they're doing something right. "But they have to meet and exceed Wall Street's already lofty expectations, and that becomes a very difficult thing for any company to do let alone an extremely popular IPO." (Reporting by Akash Sriram, Caroline Valetkevitch; editing by Colin Barr)

SpaceX posts a strong market debut powered by Starlink and artificial intelligence

SpaceX reported revenue of $7.8bn in the second quarter, up 92% year over year, thanks to progress at Starlink and growth in its artificial intelligence operations. Despite the numbers, the stock fell nearly 5% in after-hours trading. The shares could also face additional pressure as the lockup period for legacy shareholders ends. Starlink remains SpaceX's main financial engine, supported by the expansion of its global satellite internet network across consumers, businesses, the aviation and maritime sectors, and government customers. That growth, however, has come with a decline in average revenue per user, the result of an international expansion strategy built on more competitive offers. Investors are now watching whether the group can improve the network's profitability while continuing to scale it. The artificial intelligence activities, which include xAI, Grok, the social network X and a rapidly expanding data center infrastructure (Colossus), now represent SpaceX's largest investment line item. The division is already generating revenue through contracts signed with Anthropic, Alphabet and Reflection AI, but its operating losses continue to widen. The group says substantial investment will remain necessary before it can reach sustainable profitability. On the space side, the development of Starship remains a key part of SpaceX's long-term strategy, with the goal of deploying next-generation Starlink satellites and AI-dedicated orbital computing infrastructure (the Terafab project). The group also announced a partnership with Nvidia to integrate its chips into Starmind AI1 satellites. Markets will also be watching Elon Musk's comments about a potential merger with Tesla, a possibility he has declined to rule out despite a denial of recent press reports.