SpaceX revenue doubles but $18.4B capex blitz sends shares tumbling after first earnings report

SpaceX's first earnings report as a public company delivered almost everything investors could want — revenue nearly doubling, losses shrinking, all three business segments beating forecasts — and the stock still fell. Hard.

The company posted $7.8 billion in second-quarter revenue, a 92% jump from the same period a year earlier, according to CNN, Fortune, and Yahoo Finance. That cleared Wall Street's consensus estimate of roughly $6.8–6.9 billion by nearly $1 billion. Net loss narrowed to $541 million from $1 billion a year ago, and adjusted EBITDA nearly tripled to $3.5 billion. On paper, a blowout.

But SpaceX shares fell more than 8% in after-hours trading Tuesday, according to multiple outlets, because buried in the results was a number that stopped investors cold: $18.4 billion in capital expenditures for a single quarter. Analysts had penciled in roughly $13 billion. Annualized, that quarterly pace works out to $73.5 billion — well above the $48.7 billion full-year consensus analysts had coming into the report, according to Fortune.

Nearly $16 billion of that quarterly capex went to SpaceX's xAI business, which also encompasses the X social media platform and cloud services, according to CNN. The AI segment grew revenue 247% year-over-year to $2.56 billion — but still posted a $1.26 billion operating loss, according to Yahoo Finance. That loss is narrowing: the AI segment lost $2.47 billion in Q1. But the cash being shoveled in is accelerating, not slowing.

The financial tension at the heart of SpaceX's story is this: the company has one genuinely profitable engine and one enormously expensive bet. Starlink, its satellite internet service, generated $4.29 billion in Q2 revenue — up 66% year-over-year — with an operating margin of 38.6%, above the 35.9% analysts expected, according to Fortune. Subscribers hit 12 million, double the count from a year ago. Enterprise and government contracts within Starlink grew 108% to $1.8 billion, with deals spanning American Airlines, Southwest, Virgin Atlantic, and more than $6 billion in U.S. Space Force contracts. Starlink is, by every measure, the golden goose.

The space segment — rockets, Starship development — brought in $962 million, up 29% year-over-year, but posted a $542 million operating loss as R&D costs for next-generation vehicles continue to climb, according to Yahoo Finance.

SpaceX ended the quarter with $100 billion in cash, equivalents, and marketable securities, plus $47.5 billion in backlog. It also raised $25 billion in a bond offering, giving it an unusually deep war chest. The question investors are asking is not whether SpaceX can fund the spending — it clearly can — but whether the returns will ever match the scale of the outlay.

The stock's negative reaction is less a rejection of the fundamentals than a reflection of the enormous price of growth. Investors are demanding clearer evidence that its extraordinary growth can ultimately generate returns commensurate with its extraordinary spending and valuation.— Luke Lango, technology analyst and publisher of Innovation Investor

On the analyst call Tuesday evening, CEO Elon Musk offered projections that went well beyond what Wall Street models support. He said SpaceX's internal timeline for hitting $1 trillion in annual revenue had moved up from 2031 to 2030 — with a chance of 2029, according to CNN and Fortune. FactSet consensus estimates put SpaceX's 2029 revenue at roughly $207 billion, according to CNN — less than a quarter of Musk's target. CFO Bret Johnson said a $100 billion annualized revenue run rate by December was now within reach, partly due to $14.1 billion in new cloud services agreements and the company's pending Cursor acquisition, according to Fortune.

Our internal projections for reaching a trillion dollars in revenue…have moved up from 2031 to 2030. And there's a non-zero chance of that being in 2029.— Elon Musk, CEO, SpaceX

Musk also said SpaceX is building its AI compute infrastructure exclusively with Nvidia's Vera Rubin chips, and that the company plans to launch an orbital AI satellite next year — essentially putting data centers in space — which he argued would undercut competitors on cost, according to Fortune.

The after-hours selloff may not be purely about the earnings themselves. A lockup period expires later this week, freeing up more than $100 billion in shares held by pre-IPO investors and some employees, according to Yahoo Finance and CNN. An even larger tranche — roughly 900 million additional shares, larger than the entire IPO issuance — comes unlocked after third-quarter results later this year, according to Fortune. That supply overhang is a separate gravitational force pulling on the stock.

The slump in shares after the report may be less about the earnings and more about what's coming in the next few days.— Will Rhind, CEO, GraniteShares

SpaceX raised $85.7 billion in its June IPO — the largest in history — at $135 per share, according to Yahoo Finance. The stock surged after its Nasdaq debut before giving back roughly half its peak value, and has been trading below the IPO price. Tuesday's regular session had been the stock's best day since the IPO, up about 10%, before the earnings-driven reversal erased those gains in after-hours trading.

The capex debate playing out around SpaceX is the same one rattling investors across the tech sector. Microsoft, Alphabet, Amazon, and Meta have all faced scrutiny over AI infrastructure spending that runs into the tens of billions annually. What distinguishes SpaceX is the combination: it is simultaneously a launch company, a satellite internet provider, an AI cloud competitor, and a Mars colonization project — each with its own capital appetite. Starlink's margins are funding ambitions that no single profitable business line could sustain alone.

Why it matters — SpaceX's debut earnings set the template for how markets will judge the company's trillion-dollar ambitions against its voracious AI spending — and the answer so far is: not yet convinced.

Reported by cnn.com, fortune.com, wsj.com, finance.yahoo.com