SpaceX (SPCX) erases $205 billion in market value on Wednesday following its first-ever earnings release, with its AI spending forecasts weighing heavily on investors’ minds.
BofA Securities senior aerospace and defense analyst Ron Epstein comes on Market Domination to discuss his biggest takeaways from SpaceX’s results.
it was a good first quarter, right? You know, I think there was a lot of anticipation for their their first quarter release.
Um, you know, top line beat, uh profitability across all the segments was better than I think what people are looking for.
Um, they did quite well in uh their AI segment, uh selling compute that’s that’s panned out much better than uh at least early on than than than people thought.
I think what’s weighing on the shares today are are two things. You mentioned one of them, the lock up, uh, and that that people have been anticipating and you know, the the spend on AI.
That being said, I I I think some very important things did come out on the conference call with the management team.
Uh, I think probably the single most important thing is the success they’re having with Starship.
So, you know, the Starship uh launch 13 happened about two weeks ago uh and they mentioned on the call that launch 14 is going to happen uh, probably by the end of this month, maybe early next month.
And and I think this is some important milestones are going to come through on that. Uh, they said that, um, you know, they’re it’s going to go into orbit, they’re going to re-enter it.
But uh more importantly, they’re going to most likely try to catch the second stage and the first stage.
So this potentially could be the first time where you see um SpaceX uh catch both the first and second stage and that that’s a big step towards reusability.
Also on the call, management discussed the uh the heat shield system on it. The the heat shields are important for reusability.
Uh and, you know, the the real, I I I think when people tend to just focus on the AI piece or the communication piece, they really sort of miss the forest for the trees on this name because their their superpower, if you will, is their ability to put mass into orbit.
And uh, in their press release, they were, you know, I I think gave really good disclosure on uh what they’re putting in orbit for customers, what they’re putting in orbit for themselves, and and the progress that they’re making.
So, you know, on the weakness here, I mean, I I I would be a buyer. I mean, for sure, we have a buy rating. Uh but I think it’s more driven by technicals than fundamentals right now.
