SpaceX shares set to drop over 11% as AI spending worries investors

SpaceX shares are projected to open about 11.5% lower on Wednesday, trading near $110.80, after the company released its first quarterly earnings report. The report showed revenue for the April-June period beating analysts' expectations and a narrower loss compared with a year earlier, but it also disclosed AI-related capital spending of $5.1 billion, far above prior estimates.

Research director Kathleen Brooks of XTB said, "Investors are concerned about the massive surge in capex spending. It rose sixfold to $18.37 bn, exceeding estimates of $13.22 bn. The concern for investors is how fast expenditure growth is outpacing revenue growth." She added that while SpaceX’s cash balance has risen to $93.5 bn since its IPO, debt and leasing obligations have climbed to $36.8 bn, raising questions about the sustainability of continued AI investment.

AJ Bell investment director Russ Mould noted that the bulk of SpaceX’s cash generation comes from its Starlink satellite internet service, describing the recent rocket impact on the moon as “almost too on the nose” but emphasizing that the heavy AI spend, not the earnings numbers themselves, is driving market anxiety. He warned that the upcoming lock-up expiry could see more than 900 million shares offered for sale, potentially adding further pressure on the stock.

Analysts such as Matt Britzman of Hargreaves Lansdown said the market is focusing on AI as the primary narrative for SpaceX’s valuation, even as the company continues to develop rockets, satellite services, and other ventures. He suggested that the firm may evolve into an AI infrastructure provider with a substantial space component, a combination that could be attractive over the longer term but is likely to keep the shares volatile in the near term.