SpaceX stock dropped 11% Wednesday morning despite crushing second-quarter revenue estimates. The company pulled in $7.8 billion, up 92% year-over-year and well above Wall Street's $6.8 billion forecast. But the market's attention landed elsewhere: a staggering $15.8 billion in AI capital expenditure, more than double the prior quarter and roughly 21 times the $749 million spent a year ago.
The revenue picture looked solid on paper. Starlink's satellite connectivity business drove most of it, growing 66%, while AI revenue climbed about 250% to roughly $2.6 billion as new cloud-computing contracts came online. Operating losses narrowed to $143 million from $970 million. Investors, however, fixated on the spending trajectory. Total quarterly capex hit $18 billion, with AI infrastructure consuming the lion's share.
Finance chief Bret Johnsen warned that capital spending would likely hold near current levels for several quarters ahead. That comment triggered a shift in sentiment. The stock fell 7.5% in after-hours trading, then extended the decline to 11% by Wednesday's pre-market open, bucking gains elsewhere in US equity futures. Piper Sandler cut its price target to $140 from $156 while keeping a Neutral rating.
The real pressure may come later. SpaceX faces a potential share unlock that could expand the tradable float by more than 140%, adding another headwind for shareholders. Wall Street's concern boils down to sustainability: how long can Starlink's cash flow bankroll Elon Musk's ambitious AI and space development plans? The company is racing to build out computing capacity as Musk positions AI as a cornerstone of SpaceX's future valuation, but the spending is outpacing near-term revenue growth by a wide margin.
This article is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.
