SpaceX’s stock declined following its first earnings report since its June initial public offering, as the company’s substantial capital expenditure on artificial intelligence operations alarmed Wall Street despite assurances from management that investments would generate returns within a year.
Revenue for the second quarter increased 92% compared to the prior year period, surpassing estimates. However, capital expenditures jumped more than sixfold to $18.4 billion, representing more than double the quarter’s total sales. The capex figure exceeded the $13.22 billion average analyst estimate. The stock fell 7.5% in after-hours trading, mostly negating earlier gains and leaving shares more than 20% below their initial trade price on June 12. Over 80% of the capital spending directed toward artificial intelligence operations, an area where SpaceX faces competition from established players including OpenAI, Anthropic, and Google, while also challenging cloud giants Microsoft, Amazon, and Google by offering compute capacity.
SpaceX’s Chief Financial Officer characterized the spending as efficient, stating the company achieved less than one-year payback on AI compute investments. The company has secured major cloud service agreements, including deals with Google valued at up to $920 million monthly and with Anthropic providing up to $1.25 billion monthly over three years for compute capacity at SpaceX’s data center in Memphis, Tennessee. Management indicated the company contracted $6.7 billion in cloud services revenue over a six-month period beginning in October, positioning SpaceX to reach $100 billion in annualized recurring revenue by year-end, contingent on closure of the $60 billion Cursor acquisition.
The company’s AI division, SpaceXAI, has operated at a loss despite revenue generation. The unit reported $2.56 billion in second-quarter revenue alongside a $1.26 billion operating loss, following a $2.47 billion loss in the first quarter on $818 million in revenue. SpaceX faces legal challenges related to its Memphis facilities, with environmental suits alleging unpermitted use of natural gas-burning turbines for power generation. The company recorded a $354 million accrual for probable litigation losses in its quarterly filing.
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