As an abandoned SpaceX rocket crashes into the moon, Elon Musk’s science-fiction ambitions are on their own collision course with Wall Street.
SpaceX shares fell as much as 11% in after-hours trading despite the company delivering an earnings beat on Tuesday, as investors expressed anxiety over the astronomical bill for Musk’s vision of an AI-powered, space-bound future.
The rocket company, which raised a record-breaking $86 billion in its June IPO, reported that quarterly revenue had soared 92% from a year earlier to $7.8 billion, above analyst expectations.
SpaceX also nearly halved its net loss to $541 million, and reported surging revenue from its AI business after striking a series of compute deals with Anthropic and Google.
It’s the amount the company is spending on AI infrastructure, however, that is making investors jittery: nearly $16 billion for the quarter, well above the $13 billion Wall Street was expecting and more than double the previous quarter.
SpaceX is the latest tech giant to face backlash over its AI spending in recent weeks, with Tesla and Google’s shares also falling after they reported higher-than-expected capex spending.
‘I know this sounds totally nuts’
On the analyst call following the earnings, Musk and SpaceX’s other executives justified the eye-watering spending as necessary to achieve the cosmic goals that were a staple of the company’s pitch to investors in its record-breaking public offering.
The world’s richest man suggested that Starlink, SpaceX’s booming connectivity business, would soar to new heights by providing bandwidth for humanoid robots — presumably built by Tesla — on Earth and beyond.
“Using robots on the moon to scale up manufacturing on the moon — which sounds super sci-fi right now, but it’s going to happen — will enable us to build the mass accelerator on the moon,” Musk told investors. A mass accelerator is a proposed electromagnetic launch slingshot used to catapult objects into space.
“If you have a mass accelerator on the moon, I know this sounds totally nuts, but you can probably scale to a thousand times the economy of Earth in terms of intelligence launched to space, maybe even a million times,” the former trillionaire added.
Musk predicted that SpaceX could hit $1 trillion in revenue as early as 2029, bringing the target forward from 2031, and said the company plans to begin launching its orbital data centers, which SpaceX has dubbed Starmind, next year.
“This is not some sort of far future distant thing,” he added.
CFO Bret Johnsen said that SpaceX’s overall capex spend would likely be “very similar” for the next two quarters — implying that it could reach $65 billion this year — but added that SpaceX’s AI infrastructure was paying for itself almost as quickly as the company can build it.
“Specifically on the AI compute side, we’re able to deploy capital in such a way that we’re getting less than a one-year payback,” Johnsen said.
In a note on Wednesday, UBS analysts raised revenue estimates for 2026 and 2027 on the back of the outperformance of the company’s AI business, and wrote that SpaceX was “hitting on all cylinders.”
SpaceX stock’s bumpy ride
Investor nerves over rising AI bills have only added to the uncertainty surrounding SpaceX’s share price, which is now trading about 16% below the IPO price after collapsing over the past month.
The volatility is likely to continue, with around $100 billion worth of shares set to become available for sale on Thursday after the expiry of the first lock-up period for early SpaceX investors and employees.
Even with the uncertainty, SpaceX’s first earnings as a public company were a reminder that the company’s underlying business is still formidable. Revenue for Starlink, SpaceX’s main moneymaker, came in well ahead of Wall Street’s expectations, and the company said that enterprise and government revenue for Starlink grew by more than 108% year-over-year in the last quarter.
SpaceX is also coming off two successful launches of its massive Starship rocket, which is critical for Musk’s ambitious vision for moving data centers and manufacturing into orbit.
Musk pointed out on the analyst call that even without Starship, SpaceX delivers vastly more material into orbit than the rest of the world combined. The billionaire told investors that SpaceX’s engineering prowess meant that its competitors building data centers had little chance of competing, on Earth or in space.
“This is like, frankly, the New York Yankees going in and playing a little league team,” said Musk. “It’s kind of ridiculous.”
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