SpaceX Just Announced 2 New AI Supercomputing Campuses. I'd Wait Before Buying the Stock.
Key PointsSpaceX plans to invest around $24 billion at Starbase, Texas, and about $50 billion in Cochise County, Arizona.
SpaceX has announced plans to invest $24 billion in an AI supercomputing center at its Starbase headquarters in Texas, and another $50 billion in a second campus in Cochise County, Arizona. These investments total over $74 billion. However, investors may want to wait before jumping on the stock, as SpaceX is already spending around $35-$40 billion on capital expenditures in the fourth quarter alone, which is around two quarters of that spending rate.
SpaceX's cash reserves are also dwindling, with the company's cash pile shrinking from $100 billion to $90 billion. The company will likely need to rely on cash flow, borrowing, or selling new shares to fund these investments. While the stock might be cheaper than its all-time high, the growth potential of AI computing gear could be short-lived, as the technology tends to age quickly.
Investors should wait to see if operating cash flow covers a larger portion of the build-out before considering buying shares.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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