SpaceX Falls 13% After Earnings as AI Spending Raises Concerns

SpaceX shares dropped 13% on Wednesday to about $109, moving closer to their record low of $104, after the company released its first-ever quarterly earnings report and revealed a sharp increase in spending that unsettled investors. The decline also erased an estimated $81 billion from CEO Elon Musk’s net worth, reducing his fortune to $701.5 billion.

The aerospace company reported second-quarter revenue of $7.81 billion and a loss of $0.09 per share, outperforming Wall Street expectations of $6.9 billion in revenue and a projected loss of $0.26 per share, according to FactSet. SpaceX also narrowed its net loss to $541 million, compared with $1 billion during the same period a year earlier.

Despite the stronger-than-expected financial results, investor attention shifted to the company’s rapidly rising expenditures. SpaceX disclosed second-quarter spending of $18.3 billion, including $15.8 billion dedicated to artificial intelligence, exceeding analyst estimates of $13.2 billion. Capital expenditures reached $28.5 billion during the first half of the year, representing a sixfold increase from nearly $7 billion over the same period last year.

During the earnings call, Musk and Chief Financial Officer Bret Johnsen sought to reassure investors about the elevated investment levels. Johnsen said that not all capital expenditures should be viewed the same way, particularly those related to AI development. Musk also told shareholders the company plans to build AI data centers in space using Nvidia chips exclusively. He added that SpaceX now expects annual revenue to surpass $1 trillion by 2030, and potentially as early as 2029, improving on his previous projection of 2031.

Analyst reactions were mixed following the report. JPMorgan raised its price target for SpaceX shares to $240 from $225, saying the company continues to benefit from “extreme vertical integration” and highlighting the rapid pace of AI development. The bank also projected that stronger AI infrastructure and monetization could help SpaceX generate $100 billion in AI-related revenue by 2027. Wells Fargo, however, lowered its price target to $215 from $230, citing concerns over the company’s aggressive AI investment, even while acknowledging stronger-than-expected revenue forecasts for 2027 and 2028. Kathleen Brooks, research director at brokerage XTB, told The Wall Street Journal that investors are worried because spending is increasing faster than revenue growth.

Separately, attention also turned to a SpaceX rocket fragment believed to have struck the Moon early Wednesday after spending roughly a year in space. According to the BBC, the object is thought to have impacted near Einstein Crater on the Moon’s far side, opposite the Apollo 11 landing region. Images of the collision were still being processed.

Commenting on the day’s events, IG chief market analyst Chris Beauchamp told CNBC that part of a SpaceX rocket crashing into the Moon served as “a good metaphor for the share price performance so far.”

Morgan Stanley analysts had previously suggested that a share price below $100 would indicate investors were assigning no value to SpaceX’s AI business. The analysts also noted that some investors may already see little or even negative value in the company’s AI ambitions as spending on space and connectivity continues to rise despite uncertain long-term economics.

The earnings release comes after SpaceX’s landmark public trading debut in June. Since reaching an all-time high above $220 on June 16, the company’s shares have fallen by more than half. Although a successful Starship test launch last month briefly boosted optimism, the stock later slipped nearly 5%, extending a broader downward trend despite analysts remaining generally positive about the company’s long-term business outlook.