SpaceX Shares Crash 9% After First Earnings Reveal $18 Billion AI Spending Spree

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SpaceX shares fell sharply on Wednesday, August 5, after the company's first-ever public earnings report revealed a massive surge in artificial intelligence spending that spooked investors. The Elon Musk-led company started trading on the U.S. stock market in June. Quarterly revenue nearly doubled to $7.8 billion from a year earlier. But spending rose to $18.3 billion, more than six times the previous year's figure. The shares fell by 9% after the news was announced. SpaceX reported a loss of $143 million in the quarter ended June, and $2 billion in the first half of the year. Investments made in AI constituted 86% of total expenditure, amounting to $15.8 billion in the second quarter alone. During an investor call, Musk acknowledged that people seemed to be "underestimating" SpaceX. He emphasized Starlink, the company's profitable satellite internet division, which he expects to bring in $1 trillion in revenue by 2030. He highlighted the explosive growth of SpaceX's AI compute business, which is providing compute power to Google and Anthropic. Capacity will go up to at least 10 gigawatts next year, increasing from 1.4 gigawatts currently. Analysts were cautious. Matt Britzman of Hargreaves Lansdown said that by going "all in" on data centres, Musk was making SpaceX resemble "an AI infrastructure company with a remarkable space business bolted on." The rocketry business of SpaceX incurred a net loss of $542 million on revenues of $962 million. The share price has fallen steadily from its all-time high of $225 in June, to trade currently around $116. There may be further selling pressure due to the expiry of the lockup period on Thursday, when up to 911.5 million shares could enter the market.

Prepared by Christopher Adams and reviewed by editorial team.

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