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SpaceX (SPCX) reported second quarter results on Tuesday that topped estimates — its first report as a public company — which comes as the stock has been in a recent free fall. Rising capital expenditures in its Q2 report didn’t help matters.
SpaceX’s AI segment posted an operating loss of $1.26 billion versus estimates of $2.39 billion, but AI spending ballooned to $15.8 billion in the quarter, larger than expected and much higher than the $7.7 billion spent in Q1.
SpaceX stock closed down 13.6% on Wednesday, a new all-time closing low.
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The concern with SpaceX’s large capital requirements — like those of other large AI frontier startups — is that its AI infrastructure investments will not generate a healthy return given the level of cash required.
“We now project capex of nearly $200B in both 2027 & 2028, which further pressures FCF in 2027, a trend we see across the hyperscalers,” JPMorgan analyst Doug Anmuth said in a note to investors. On the flip side, Anmuth was impressed by SpaceX’s rising annual revenue run rate (ARR), which CEO Elon Musk said could hit $100 billion by the end of the year.
SpaceX said its Q2 overall capital expenditures came in at $18.37 billion, slightly below estimates for $18.58 billion.
As for the quarter, SpaceX reported Q2 revenue of $7.8 billion versus $6.81 billion, per Bloomberg consensus, up sequentially from $4.7 billion in Q1. SpaceX posted adjusted EBITDA of $3.5 billion vs $2.0 billion consensus expected.
Separately, SpaceX announced on Tuesday that it is partnering with Nvidia to design its Starmind AI-1 payload, which would bring “datacenter class compute” into orbit. The partnership will use Nvidia’s Rubin GPUs and Vera CPUs and increase SpaceX’s peak satellite computing capacity to 250 kW.
Musk added on the earnings call that Nvidia would be the exclusive supplier of chips for SpaceX’s AI chip needs.
With its Q2 results behind it, a big overhang still looms.
“[On Tuesday afternoon] SpaceX🚀 (SPCX: NASDAQ) reports as a public company for the first time, and two days later, Aug. 6, its lockup frees hundreds of millions of insider shares — roughly triple the current tradable float,” Epistrophy Capital’s Cory Johnson wrote in a client note.
The lockup expiration will free up to 20% of shares for sale, and investors are worried that the added supply will keep the stock under pressure.
Another part of the capital expenditures story is the company’s satellite broadband service, Starlink, and what’s next for the launch business with Starship.
