SpaceX shares plunged 13% to $109 on Wednesday after the rocket maker reported a sixfold increase in second-quarter spending to $18.3 billion, driven by massive artificial intelligence investments. Despite beating Wall Street earnings and revenue estimates, the historic first quarterly update triggered heavy selling and sharp divisions among analysts.
Earnings Beat Versus Spending Shock
Space Exploration Technologies posted its first quarterly financial update since going public, revealing a complex picture of soaring revenues and aggressive capital outlays. The Elon Musk-led rocket maker reported quarterly revenue of $7.81 billion and a loss per share of 9 cents. Those figures beat Wall Street estimates of $6.9 billion in revenue and a loss of $0.26 per share, according to FactSet data cited by Forbes. The company’s net loss narrowed to $541 million from $1 billion in the year-earlier period.
Yet investor enthusiasm gave way to a sharp sell-off as financial disclosures laid bare the immense scale of the company’s expansion. Shares of SpaceX fell 13% to around $109 by Wednesday afternoon, approaching an all-time low of $104. The market reaction reflected immediate anxiety over cash burn. The rocket maker spent $18.3 billion in its second quarter alone, with $15.8 billion dedicated to artificial intelligence. Total capital expenditures reached $28.5 billion in the first half of the year, marking a sixfold increase over last year’s nearly $7 billion spend.
The sell-off hit Elon Musk’s personal fortune directly. Musk’s net worth was cut by $81 billion to $701.5 billion during the market decline, though his wealth remained well above that of other tech billionaires.
Executive Defense and AI Ambitions
During the earnings call, executives pushed back against mounting concern over the steep expenditure curve. SpaceX Chief Financial Officer Bret Johnsen tried to cool market jitters by telling shareholders that all capex is not the same
, particularly regarding artificial intelligence infrastructure.
Amplifying that strategy, Musk announced plans to build AI data centers in space utilizing Nvidia chips exclusively. Company leadership also pulled forward financial targets, forecasting that annual recurring revenue across all business verticals will top $100 billion by the end of this year. Furthermore, management accelerated its long-term projection for total revenue, expecting revenue to top $1 trillion by 2030 and potentially as soon as 2029, down from an earlier projection for 2031.
Market analysts offered starkly contrasting views on whether those ambitious goals justify the near-term cash depletion.
Wall Street Divisions: Bullish Targets Meet Skepticism
Major brokerages maintained buy ratings while adjusting price targets to account for the heavier capital expenditure cycle. Bank of America expressed confidence in the company’s core positioning following the report.
Epstein added that while the stock remains negatively impacted on elevated capex expectations and questions on monetization, the firm remains positive on key market positioning after the second quarter.
JPMorgan analysts lifted their price target to $240 from $225, pointing to extreme vertical integration and noting that the pace of change in AI is incredibly fast
. JPMorgan noted that a step-up in infrastructure could push SpaceX’s AI revenue to $100 billion by 2027. Similarly, Deutsche Bank maintained a buy rating with a $235 price target, noting that the near-term growth trajectory is much more robust than anticipated.
Not all institutions shared the optimism. Kathleen Brooks, research director at brokerage XTB, highlighted the core anxiety driving the sell-off, telling Forbes that the concern for investors is how fast expenditure growth is outpacing revenue growth
. Wells Fargo trimmed its price target from $230 to $215, cautioning that capital expenditure estimates were climbing faster than expected even as the company was off to an ambitious start.
Catalysts, Volatility, and a Lunar Impact
Market watchers warned that near-term turbulence is far from over. Goldman Sachs advised clients to expect ongoing share volatility as initial stock lockup tranches expire and distribute wider price discovery. At the same time, physical debris from the company’s flight program added an odd atmospheric note to the financial fallout: a stray piece of a SpaceX rocket that spent a year in orbit likely crashed into the moon near the Einstein Crater on Wednesday morning.
Summarizing the mood on trading desks, IG chief market analyst Chris Beauchamp told CNBC that part of a SpaceX rocket crashing into the moon this morning is probably a good metaphor for the share price performance so far
. With a catalyst-rich window ahead, investors will watch whether the company can convert its massive compute investments into tangible cloud and connectivity revenue before cash burn strains market patience further.
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