SpaceX earnings for the second quarter beat Wall Street on almost every number that mattered, and still, once the after hours session got going, SpaceX stock drops undid some of the good news, a reminder that a single good quarter doesn’t really erase the SpaceX bear case that’s been building since June. Revenue landed at $7.8 billion against a $6.81 billion consensus, and adjusted EBITDA came in at $3.5 billion versus the $2.0 billion analysts had penciled in. It’s the company’s first SpaceX earnings report since going public, and at the time of writing, it’s also one of the more lopsided beats Wall Street has seen from a brand new listing in a while.
Also Read: Can SpaceX Stock Be Shorted? Elon Musk Warns Bears Face a Massive Squeeze Risk
SpaceX Earnings Beat Wall Street As AI Spending Fuels Doubts
Numbers Come In Ahead Of Estimates
The headline SpaceX earnings figures were hard to argue with. Revenue climbed to $7.8 billion, up from $4.7 billion in the first quarter, and that pace of growth is roughly what let SpaceX beat Wall Street so comfortably in its debut SpaceX earnings report. Starlink also had a solid quarter of its own, with subscribers passing 12 million and the connectivity business posting adjusted EBITDA of $2.60 billion, a bit ahead of the $2.41 billion analysts had expected.
Source: Yahoo Finance
An Expensive Bet On AI Is Starting To Worry Wall Street
SpaceX AI spending hit $15.8 billion in the quarter, more than double the $7.7 billion it spent back in Q1, even though the AI segment’s operating loss actually narrowed, coming in at $1.26 billion against a projected $2.39 billion. Total capital expenditures were $18.37 billion. It’s this kind of SpaceX AI spending, and how long it can keep climbing, that is doing most of the work behind the SpaceX bear case right now, and it is also a big reason SpaceX stock drops kept happening even after a beat this clean. Analyst Cory Johnson of Epistrophy Capital pointed to a second, more immediate worry in a note to clients:
“[On Tuesday afternoon] SpaceX (SPCX: NASDAQ) reports as a public company for the first time, and two days later, Aug. 6, its lockup frees hundreds of millions of insider shares, roughly triple the current tradable float.”
That lockup frees up to 20% of shares for sale, and for a lot of investors it matters more right now than this quarter’s SpaceX earnings did. SpaceX also announced a partnership with Nvidia on its Starmind AI-1 orbital payload, using Rubin GPUs and Vera CPUs to push satellite computing capacity up to 250 kW.
Musk Defends The Long Game On Starlink And Starship
Musk spent a good chunk of the call making the case that these SpaceX earnings undersell where the company is actually headed, and he leaned on Starlink and Starship as proof the SpaceX bear case might be overdone.
Elon Musk, CEO of SpaceX, said:
“It’s not out of the question that at some point Starlink will deliver the majority of the world’s internet.”
He also stated:
“Unless we discover problems after mission data review, SpaceX will attempt to catch the ship with the tower on next flight.”
Goldman Sachs, the lead underwriter on the IPO, is forecasting SpaceX’s annualized revenue growing from around $31 billion today to $846 billion within five years, and that kind of runway is exactly why some analysts keep saying a single SpaceX earnings report shouldn’t move the stock this much either way.
Source: Goldman Sacks
When SpaceX beat Wall Street this clearly, a lot of investors expected calmer trading, not more SpaceX stock drops. Still, with the lockup landing this week and SpaceX AI spending showing no sign of slowing down, that calm doesn’t look likely just yet.
