SpaceX shares slide as investors question AI spending despite revenue beat

SpaceX's shares dropped $10.06, or 8%, to $115.27 in early afternoon trading on Wednesday after the company released its first public quarterly earnings report. The report showed second-quarter revenue of $7.8 billion, beating analysts' expectations, and a narrowed loss of $541 million compared with a $1 billion loss a year earlier. However, investors focused on the company's $15.8 billion AI-related capital spending in the quarter, which more than doubled the amount spent in the prior quarter and represented 86% of total CapEx.

"The entire market is beginning to suspect that the extraordinary spend on AI might not work out for every firm," said David Trainer, CEO of New Constructs, an investment research firm.

"Elon Musk has a history of overpromising, so investors took some of the optimistic forecasts with a grain of salt," said Jay Ritter, an IPO expert and professor at the University of Florida.

"The good news is that revenue and earnings for the quarter were above expectations, and that the company was optimistic about its ability to launch orbital data centers as early as next year. But the bad news is that the company is spending lots of cash on Earth-based data centers, a business that has a lot of competition," Ritter added.

Musk told an earnings call that the firm is building AI compute capacity at scale and improving its models, citing the recent release of Grok 4.5. Analysts noted that while the satellite division, including Starlink, remains the primary revenue source, the AI segment could become a key driver of future valuation. Nonetheless, Morningstar's Nicolas Owens described the shares as still overvalued.

Potential additional pressure on the stock could arise on Thursday when up to 911.5 million shares become eligible for sale after a lock-up period expires, increasing the supply of shares in the market.

"The lockup expiration does not mean every insider or early investor will sell, but it does increase the potential supply of shares coming to market, which can create near-term pressure on the stock," said Paul Karger, co-founder and managing partner at TwinFocus.