SpaceX sheds $120 billion after quarterly results

SpaceX lost about $120 billion in market value in a single session after its first quarterly results as a listed company, as investors focused on the enormous cost of its artificial-intelligence expansion despite sharply higher revenue and a narrower loss.

Shares of Space Exploration Technologies Corp fell 13.61% on August 5 to close at $108.27, wiping roughly $120 billion from the company’s equity value. The sell-off followed results issued after the previous session’s close and marked another sharp reversal for a stock that had surged after its June flotation.

The decline centred attention on SpaceX’s capital requirements. The company spent about $18.4 billion on capital expenditure during the second quarter, with roughly $15.8 billion directed to AI computing infrastructure. That AI outlay was more than double the $7.7 billion spent in the first quarter and dwarfed the company’s quarterly revenue.

SpaceX nevertheless reported revenue of $7.8 billion for the three months ended June 30, up 92% from $4.1 billion a year earlier. Its net loss narrowed to $541 million from about $1 billion, while adjusted earnings before interest, taxes, depreciation and amortisation rose 191% to $3.5 billion.

The figures illustrated the tension confronting shareholders: SpaceX’s businesses are expanding rapidly, but management is committing tens of billions of dollars to data centres and computing capacity before the returns from that investment are fully established. The company said its AI segment remained loss-making on an operating basis, although adjusted EBITDA for the division turned positive.

AI revenue rose strongly as SpaceX began monetising computing capacity at its Colossus facilities. New cloud-services agreements contributed $1.6 billion of incremental AI infrastructure revenue during the quarter, while the company said it had signed $14.1 billion of contracted cloud sales. AI compute capacity reached 1.4 gigawatts, compared with 400 megawatts a year earlier.

Management defended the spending programme during its earnings call, arguing that AI infrastructure, Starship and next-generation Starlink systems offered the company its strongest long-term investment opportunities. Chief financial officer Bret Johnsen said SpaceX remained focused on capital efficiency, returns and preserving an investment-grade balance sheet.

Chief executive Elon Musk said the company expected to reach a $100 billion annualised revenue run-rate by the end of 2026, with AI cloud services expected to make a major contribution. Such targets, however, depend on SpaceX converting heavy upfront expenditure into sustained revenue and cash generation.

Starlink remained the company’s principal profitable operating engine. Connectivity revenue rose 66% year on year to about $4.3 billion, helped by subscriber growth and expanding enterprise and government business. The segment generated operating income of about $1.7 billion, providing cash-generating capacity as SpaceX develops more capital-intensive projects.

SpaceX also reported progress in its traditional space operations, including Starship testing and government contracts. Its second-quarter announcement highlighted more than $6 billion of multi-year US government awards for Starshield, its national-security satellite business, while the company continued investing in launch infrastructure and satellite production.

The August sell-off came less than two months after SpaceX completed its initial public offering, correcting descriptions of the company as a private firm. SpaceX priced the offering at $135 a share and sold 638.9 million shares after underwriters exercised their full option, generating about $85.7 billion in net proceeds. Its Class A shares began trading on Nasdaq on June 12 under the ticker SPCX.

The stock had initially climbed as high as $225.64 before reversing sharply, leaving investors to reassess a valuation built around expectations for Starlink, reusable rockets and a fast-growing AI infrastructure business. By the time of the post-earnings fall, the shares were already below their IPO price.

SpaceX entered the quarter-end with substantial liquidity after the flotation and a $25 billion bond sale completed in June. The bonds were issued across five maturities running from 2031 to 2056, with a weighted average interest rate of 5.855%.