Can SpaceX Overcome the AI Trade Sell-Off?
Key PointsSpaceX's AI sales rose 830% to $7.6 billion in the third quarter.
Artificial intelligence stocks are currently facing a sell-off, prompting investors to question the effectiveness of tech companies' investments in AI infrastructure. SpaceX's shares have been particularly affected, trading below their IPO price months after their debut. Despite a 830% surge in AI revenue in the third quarter, exposing the company's spending potentially being worth the costs, SpaceX investors remain skeptical.
The company's capex increased by 185% to $19.6 billion in the quarter, with 83% of that allocated to AI. While SpaceX's Starlink satellite internet business grew by 69% to $5.2 billion, and its space launch business is expanding, the high AI spending is a cause for concern among shareholders. If SpaceX cannot demonstrate sustained growth in AI sales amidst rising expenditures, investors may maintain their skepticism, potentially hindering the company's stock performance.
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