SpaceX’s first results as public company spook investors

SpaceX, under the leadership of Elon Musk, has released its first earnings report since going public in June, delivering stronger-than-anticipated revenue while simultaneously alarming investors with its substantial capital expenditure. For the second quarter, revenue reached $7.8bn, marking a 92% year-on-year increase and surpassing the estimated $6.8bn.

Furthermore, the company managed to narrow its net loss to $541m, a significant improvement from the $4.3bn loss reported in the previous quarter. However, these accomplishments did little to reassure investors, as shares plummeted as much as 8% in after-hours trading, sparked by the scale of SpaceX's AI investment.

Capital expenditure surged to $18.4bn for the quarter, with approximately $15.8bn allocated to AI infrastructure, exceeding the $13.2bn forecast by analysts. The company's Chief Financial Officer, Bret Johnsen, assured investors that AI compute investments were paying off within a year, and capital spending was likely to stay at similar levels for several more quarters.

During the earnings call, Elon Musk defended SpaceX's ambitious goals, stating that the target of $1trn in annual revenue had been moved up by one year, from 2031 to 2030, with "a non-zero chance" of being achieved in 2029. Despite this optimistic outlook, the reaction to the earnings report has marred SpaceX's stock since its record-breaking debut in June, when the company raised $75bn at a price of $135 per share, temporarily achieving a market value above $1.7trn.

Since then, shares have fallen considerably below the IPO price, losing more than $1trn in value since the peak experienced in June. As the 'lockup period' expires on Thursday, hundreds of millions of insider shares will become available for sale, potentially further depressing the stock's value.