Anyone who expected the 2026 second-quarter earnings report from Space Exploration Technologies (SPCX +15.83%) on Aug. 4 to boost the stock price didn't get it. In after-hours trading following the report and earnings call, SpaceX's stock price was down more than 8%.
We'll quickly look at why the earnings weren't enough to immediately send the stock price higher, as well as why $63 could be an important price level for investors to watch.
Image source: Getty Images.
Why the quarter didn't move the needle SpaceX reported $7.8 billion in revenue for the second quarter, a 92% jump from the prior-year period. Revenue for its artificial intelligence (AI) division tripled to $2.6 billion, and revenue from SpaceX's satellite internet service, Starlink, climbed 66% to $4.3 billion.
SpaceX CEO Elon Musk also projected SpaceX could hit $1 trillion in revenue by 2030, a year earlier than the 2031 time frame previously forecast.
That said, it wasn't enough to send the stock price higher. An investing theme of 2026 has been expecting greater returns and progress from companies investing more in AI infrastructure build-outs, and SpaceX is no exception, especially given its unprofitable status. For the second quarter, capital expenditures totaled $18.4 billion, an increase of $2.8 billion.
The immediate selling after the earnings report doesn't guarantee the stock price will keep dropping. But if it does, history offers a useful comparison to keep in mind.
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The $63 price point Sometimes, history helps by offering examples of how to frame risk against reward.
While not on the same scale in terms of valuation, Facebook, now Meta Platforms, was a highly anticipated initial public offering in May 2012. Its life as a public company, however, was rocky out of the gate. When Mark Zuckerberg's social network went public, shares were already down 53% roughly four months later. That may have seemed like a time to give up on the stock, but it turned out to be a bottom for Facebook's stock price.
According to Barron's, over the next 12 months, the Facebook stock price shot up 140%. Even more impressive were the long-term gains, as the stock price climbed 3,250% from that bottom to July 28, 2026.
If the SpaceX stock price were to follow a similar path, a 53% drop from its IPO offering price of $135 would place it in the $63 range. Again, nothing says it will drop that low, but as history has shown, more aggressive investors who believe in SpaceX's long-term vision and plan to hold the stock for years could view any continued pullback as a buying opportunity.
All eyes were on Space Exploration Technologies (SPCX +15.83%) stock this week as it reported its first results since going public.
For the 2026 second quarter, SpaceX trounced Wall Street expectations on both the top and bottom lines. Analysts were looking for a $0.26 loss per share on $6.9 billion in revenue, and the company reported a $0.09 loss per share on $7.8 billion in revenue, a 92% year-over-year increase.
Despite what appears to be positive financials, the stock fell 12% after the report. The number that stood out to the market was $18.4 billion. That was the capital expenditures (capex) in the quarter, and the market was none too pleased with it.
Image source: Getty Images.
The opportunity for SpaceX is in AI SpaceX investors think the company is going to the moon, and they want to be a part of it. However, if you dig deeper, the company sees its main opportunities in artificial intelligence (AI), and that's what investors are really getting. Management was clear about this in its investing prospectus, citing a $28.5 trillion market opportunity, with $26.5 trillion of it in AI. This is what came out of the first earnings report, as well.
Out of the $18.4 billion capex in the second quarter, $15.8 billion went to AI, double last year's total amount. Musk claimed, "We're building AI compute capacity at scale faster than anyone else."
This is much less than what Amazon and Alphabet are spending, at $220 billion and $200 billion annually, respectively, but the market has become wary of high AI spending.
President Gwynne Shotwell pointed out that already a few weeks into the third quarter, SpaceX has contracted for $6.7 billion in revenue over the next six months, and she claims the business will reach a $100 billion in annualized revenue run rate by the end of the year. CFO Bret Johnson also downplayed the risk of high capex by confirming that it will take less than a year to recoup the investment.
The space opportunity Many investors are riveted by the space opportunity, and that might take a while to get off the ground. The company is transitioning from its cost-effective, partially reusable Falcon series to Starship, which is expected to be fully reusable and eventually reach Mars. SpaceX has had to repeatedly postpone takeoffs, but Musk is confident that in a year from now, it'll be sending up a flight a day.
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He explained the space business's results in terms of tonnage, noting that right now SpaceX delivers 2,500 tons to orbit per year, while the competition delivers 300 tons. He expects Starship to reach 1 million tons annually and eventually 10 million tons annually.
These are exciting updates, but the market isn't buying it right now. That means either Musk and company may not meet their lofty expectations, or investors who buy the stock today will get a windfall next year.
The market is leaning toward the former, and investors who want to buck that trend are betting on high risk and high reward.
Dan Ives left Wedbush Securities in July as the global head of technology research to start what he described as a merchant bank. But before he did, he shared a price target for Space Exploration Technologies (SPCX +15.83%).
Here's his price target on SpaceX stock, as well as what a $10,000 investment today would look like if it hit that target.
Image source: The Motley Fool.
How high SpaceX could soar Ives has a $190 price target on SpaceX stock and wrote in a note shared by Yahoo! Finance that SpaceX is "well-positioned to become a major hyperscaler with its vertically integrated platform across connectivity, launch, and AI infrastructure."
SpaceX's 2026 second-quarter earnings report included updated figures on how those businesses are performing, which we'll look at.
In its connectivity business, SpaceX has 12 million subscribers for its satellite internet service, Starlink, with more than 10,000 satellites in orbit. The $4.3 billion in revenue the connectivity business generated in the second quarter accounted for the bulk of SpaceX's $7.8 billion in total sales for the quarter.
Thus far in 2026, its launch business, or what SpaceX refers to as its space business, has generated $962 million in revenue. While the space business may not be a primary revenue generator, it is the engine that fuels the overall business, enabling satellites and, eventually, orbital data centers to launch into space.
Finally, its AI business segment generated $2.6 billion for the second quarter of 2026, a 247% increase from the prior-year period. It entered into several agreements to offer computing capacity to other companies, totaling $14.1 billion in contracted sales, with $1.6 billion in revenue from those agreements recognized in the second quarter.
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Investing $10,000 in SpaceX On Aug. 7, SpaceX closed at $133.11 per share. With a $10,000 investment, that would yield slightly more than 75 shares through fractional investing, but we'll keep it at 75 shares to keep the example simple.
If SpaceX were to reach Ives' price target of $190 and an investor bought shares at that Aug. 5 closing price of $108.27, their investment would be worth approximately $14,250. That would be a gain of 42%.
For comparisons to Ives' price target, the median price target among the 37 analysts tracked by CNN is $217. The highest price target from the group is $800, while the lowest is $75. These price targets do not guarantee where SpaceX will trade, but they do give investors a chance to determine whether the rewards could outweigh the risks.
SpaceX's $300 billion swing in market value this past week put Musk back in grind mode, having to execute on highflying promises made in the lead-up to the biggest IPO ever.
Space Exploration Technologies Corp. (SPCX +15.83%) stock rocketed 15.8% higher on Friday while the S&P 500 and the Nasdaq Composite jumped 0.6% and 1.2%, respectively.
Shares of Elon Musk's rocket company rose after a post-IPO lock-up expiration failed to drag the stock down. At the same time, the announcement of a major project in Texas helped buoy the stock price.
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Why SpaceX stock jumped after the lockup expired On Thursday, 911.5 million shares became eligible to trade as the first tranche of the lockup expired -- the stretch after an initial public offering (IPO) when insiders and early backers are barred from selling. That more than doubled the stock available to public markets, and investors were nervous the share price would tank as early investors and employees rushed to sell part of their stakes.
Image source: Getty Images.
The fact that did not come to pass was taken by the market as a sort of endorsement from company insiders.
It helped that on the same day, SpaceX announced, alongside Tesla, a $16.8 billion investment in Terafab. The first phase will see a 100-million-square-foot semiconductor complex constructed in Texas, providing at least 3,000 jobs.
Why I'm still staying away from SpaceX stock Despite the positive news, I would still stay away from SpaceX stock. While the company's latest earnings showed huge revenue growth, it is still burning cash at an alarming rate, and that isn't likely to change meaningfully for years. It is still seriously overvalued for my money.
Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Shares of SpaceX (NASDAQ:SPCX – Get Free Report) were up 15.8% during trading on Friday after Wall Street Zen upgraded the stock from a sell rating to a hold rating. The company traded as high as $133.48 and last traded at $133.11. 237,684,429 shares changed hands during mid-day trading, an increase of 110% from the average session volume of 113,126,078 shares. The stock had previously closed at $114.92.
Several other research analysts have also commented on the stock. Daiwa Securities Group started coverage on shares of SpaceX in a report on Thursday, July 2nd. They issued a “neutral” rating and a $175.00 price objective for the company. William Blair reaffirmed an “outperform” rating on shares of SpaceX in a research note on Friday, July 31st. UBS Group reiterated a “buy” rating on shares of SpaceX in a research report on Wednesday. Piper Sandler decreased their price target on shares of SpaceX from $156.00 to $140.00 and set a “neutral” rating for the company in a research note on Wednesday. Finally, Phillip Securities upgraded shares of SpaceX to a “strong sell” rating in a report on Friday, July 31st. Two analysts have rated the stock with a Strong Buy rating, twenty-five have assigned a Buy rating, eight have issued a Hold rating and five have given a Sell rating to the stock. According to data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and a consensus target price of $227.31.
View Our Latest Research Report on SpaceX
SpaceX News Roundup Here are the key news stories impacting SpaceX this week:
Positive Sentiment: Lockup pressure was less severe than feared. Approximately 911.5 million shares became eligible for trading, more than doubling SpaceX’s public float. However, the stock remained resilient, suggesting that selling may have been largely anticipated and that existing shareholders and retail investors were willing to support the shares. SpaceX’s stock is having one of its best days ever with the first lockup expiration now behind it Positive Sentiment: Analysts turned more constructive. Argus upgraded SpaceX to Buy and set a $160 price target, citing accelerating AI revenue, cloud contracts and a potential payback period of less than one year for new AI spending. JPMorgan also raised its target, reinforcing the bullish view on SpaceX’s compute opportunity. SpaceX Stock Just Scored a New Buy Rating Positive Sentiment: Quarterly growth remains impressive. SpaceX reported revenue of $7.81 billion, up 91.9% year over year, and a smaller-than-expected loss of $0.09 per share. Reports also highlighted $20.8 billion of combined AI cloud contracts, $2.56 billion in AI revenue and continued profitability at Starlink. SpaceX Signed $14.1 Billion of Cloud Contracts in a Single Quarter Positive Sentiment: AI infrastructure plans are expanding. SpaceX’s partnership with Nvidia to deploy next-generation hardware in terrestrial and orbital data centers, along with the planned $16.8 billion Terafab chip factory with Tesla, strengthens the company’s long-term AI and compute narrative. SpaceX’s Terafab will rely on natural gas power plants Neutral Sentiment: Speculation about a SpaceX-Tesla merger or tracking-stock structure added attention but remains unconfirmed. Jefferies characterized the possibility as uncertain rather than an immediate catalyst. Jefferies weighs in on SpaceX-Tesla merger speculation Negative Sentiment: Risks remain substantial. SpaceX is committing roughly $15.8 billion of quarterly capital spending to AI and remains GAAP-loss-making. Additional staged unlocks through December could create further supply, while concerns about contract cancellations, valuation and the execution of Starlink Mobile continue to limit investor conviction. Institutional Trading of SpaceX A number of hedge funds have recently modified their holdings of the business. Atwood & Palmer Inc. purchased a new stake in shares of SpaceX in the 2nd quarter worth about $29,000. Marquette Asset Management LLC purchased a new position in SpaceX during the 2nd quarter valued at about $32,000. Burkett Financial Services LLC bought a new stake in SpaceX during the second quarter worth about $70,000. Contravisory Investment Management Inc. bought a new stake in SpaceX during the second quarter worth about $73,000. Finally, Thurston Springer Miller Herd & Titak Inc. purchased a new stake in SpaceX in the second quarter worth about $89,000.
SpaceX Stock Up 15.8% The stock has a fifty day moving average price of $143.35. The company has a debt-to-equity ratio of 0.29, a quick ratio of 1.11 and a current ratio of 5.12.
SpaceX (NASDAQ:SPCX – Get Free Report) last released its earnings results on Tuesday, August 4th. The company reported ($0.09) earnings per share (EPS) for the quarter, beating the consensus estimate of ($0.26) by $0.17. The business had revenue of $7.81 billion for the quarter. The firm’s revenue for the quarter was up 91.9% compared to the same quarter last year. As a group, equities analysts expect that SpaceX will post -0.28 EPS for the current year.
About SpaceX (Get Free Report)
SpaceX, or Space Exploration Technologies Corp., is an American aerospace company focused on the design, manufacture and launch of advanced rockets and spacecraft. The company develops launch vehicles and space systems used for commercial, government and scientific missions, with a strong emphasis on lowering the cost of access to space through reusable rocket technology.
Founded in 2002 by Elon Musk, SpaceX has built a broad portfolio of products and services that includes the Falcon 9 and Falcon Heavy rockets, the Dragon spacecraft and the Starship development program.
See Also Five stocks we like better than SpaceX Datadog’s Drop Says More About Expectations Than Earnings D-Wave’s Quantum Breakthrough Couldn’t Save QBTS From a Sell-Off Cloudflare’s Beat-and-Raise Quarter Puts Its AI Edge Story in Focus Solventum Nears Inflection Point As It Begins to Unlock Value Receive News & Ratings for SpaceX Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for SpaceX and related companies with MarketBeat.com's FREE daily email newsletter.
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In this Tech Corner, Rick Ducat breaks down SpaceX's (SPCX) first earnings report. Ducat examines SpaceX's expanding business model, Starlink's growing profitability, and the company's ambitious plans for cloud computing, Starship, and the proposed acquisition of Cursor.
SpaceX (SPCX) inaugural earnings call following its blockbuster debut on Nasdaq sent “seismic” ripples across Wall Street.
While investors digested the aerospace giant's eye-popping $15.8 billion artificial intelligence (AI) capital expenditure outlay and its bold operational roadmaps, Elon Musk made it clear where that capital is flowing.
By laying out the fundamental physical and architectural bottlenecks defining high-performance computing – both on Earth and in low Earth orbit – the earnings call provided an undeniable bullish thesis for three core technology powerhouses.
Here is why Nvidia, Micron, and SK Hynix stand as clear must-own equities in the wake of SpaceX’s market update.
SpaceX’s announcement that it has partnered with Nvidia to construct its flagship “Starmind” AI satellite compute payload cements the giant’s absolute dominance across non-terrestrial hardware frontiers.
Powering a system modeled directly on its cutting-edge Vera Rubin NVL72 architecture, Nvidia won an exclusive commitment from Musk to supply all future SpaceX compute architecture.
SpaceX's internal Q2 AI infrastructure expenditure topped $15.8 billion, signaling that orbital data center deployment will quickly transform space exploration into a primary hyperscale vector.
With prototype orbital delivery targeted for “early next year” ahead of a massive production run – NVDA’s lock on space-based edge computing adds a lucrative long-term growth catalyst to an already robust enterprise ledger.
During the call, billionaire Elon Musk pinpointed memory output constraints as the definitive bottleneck constraining global AI deployment, noting that while DRAM production grows at 20% annually, demand surges above 200%.
As the undisputed heavyweight in High-Bandwidth Memory (HBM) – holding over half of the global market – SK Hynix stands as the primary structural beneficiary of this structural deficit.
The South Korean semiconductor leader recently solidified its market position by executing a historic, multiyear $500 billion strategic infrastructure and supply agreement with Nvidia centered around the Vera Rubin platform.
Given that HBM packaging remains critical to eliminating compute latency in next-gen satellite nodes and ground clusters alike, SKHY remains exceptionally undervalued relative to its structural earnings tailwinds.
While top-tier memory rivals commit the overwhelming majority of their fabrication capacity to fulfill high-margin HBM contracts, Micron is reaping immense rewards from the resulting supply void in standard DRAM and NAND flash.
As conventional memory prices escalate even faster than specialized HBM stacks due to acute global capacity allocation shifts, Micron’s operational blend position offers maximum margin exposure.
Micron has steadily closed the gap in global DRAM revenue share, proving that a dual focus on high-performance enterprise storage and conventional DRAM yields phenomenal pricing power during a supply supercycle.
Musk’s assessment that basic economic forces will drive memory unit pricing upward over a multiyear horizon ensures Micron remains an indispensable core holding for tech portfolios.
Space Exploration Technologies (SPCX +15.83%) is one of the hottest companies in the market. It went public two months ago with a lot of fanfare and rising stock prices, but has since sold off and is now below pre-IPO levels.
The company also recently announced second-quarter earnings, where investors got a first look at fresh finances and could better understand the company's direction without any IPO marketing fluff.
But is the stock worth buying under $125 per share? Let's take a look at some history.
Image source: The Motley Fool.
Letting the initial dust settle is a good idea for investors A lot happens in the first year after a company goes public. Investors start to get a feel for how a company does from quarter to quarter, as some companies consistently beat expectations while others just meet them. This can cause some wild post-earnings movements as investors begin to understand how management behaves.
Another event that happens during the first year is insider investor lockup periods. After SpaceX's first earnings report, some investors are allowed to sell their shares, which could create a supply-and-demand imbalance and crater the stock price even further. SpaceX's lockup periods end at different times in 2026 and 2027, so waiting a year to invest could also be a smart idea from this standpoint.
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However, investors do have one familiar management team member to deal with: CEO Elon Musk. Musk is also the CEO of Tesla (TSLA +2.83%), and he took that company public years ago. How did the stock do in the first year of trading? Well, it rose just less than 16%.
TSLA data by YCharts
That's not too bad of a one-year return, but what about over the next five?
TSLA data by YCharts
Tesla really didn't take off as an investment until mid-2013, and went through a few years of just OK returns. But is this comparable to SpaceX? I don't think so.
Tesla went public at a completely different stage of its business than SpaceX. In 2010, Tesla had sold just over 1,000 vehicles when it went public. That would be equivalent to SpaceX going public not long after it delivered its first payload.SpaceX is a far more mature business now than Tesla was when it went public, so comparing the two isn't perfect, besides looking at what Elon Musk's companies tend to do.
So, should you buy the stock below $125 per share? I'd say investors need to be patient. History shows there's no need to rush and buy the stock during the first year. There are a lot of questions to be answered and various lockup periods that could affect demand for the stock, and investors aren't going to miss out on huge gains by waiting for the first year to complete. In mid-2027, investors can reassess, but I think exercising patience is a smart move.
Buying the dip in SpaceX (NASDAQ: SPCX) on the day Elon Musk lost his trillionaire status has yet to pay off, with the stock still trading below its June 23 level despite a recent rally.
Based on SpaceX’s August 7 closing price of $133.11, the investment would have declined by about 15% from the June 23 reference price of roughly $156, bringing its total value to approximately $852.
Notably, shares surged 15.83% in the latest trading session, marking their strongest single-day gain since the weeks following the IPO. The rally added more than $300 billion in market value and lifted the company’s valuation to about $1.74 trillion.
SpaceX post IPO rally SpaceX shares entered the market on June 12 at an IPO price of $135 before opening near $150 and quickly climbing to an intraday high of $225.64 on June 16.
The rally briefly pushed the company’s valuation toward the $3 trillion mark and lifted Musk’s estimated net worth above $1 trillion. Some estimates placed his fortune as high as $1.45 trillion during the post-IPO surge.
However, the momentum reversed sharply as technology stocks came under pressure from rising Treasury yields, concerns over artificial intelligence spending, and widespread profit-taking following the IPO euphoria.
The sell-off intensified on June 22 when SpaceX plunged 16.4% in a single session. The decline erased an estimated $240 billion from Musk’s fortune and contributed to a broader loss of roughly $600 billion in market value from the stock’s peak.
By June 23, SpaceX had surrendered most of its post-IPO gains, pushing Musk’s net worth back below the trillion-dollar threshold.
SpaceX remained volatile throughout July, with shares at one point falling to around $105. The company’s market capitalization also dropped into the $1.4 trillion to $1.5 trillion range.
Investor concerns centered on rising capital expenditures, dilution risks linked to acquisitions, a large post-IPO bond offering, and the upcoming expiration of share lockups.
SpaceX impressive earnings Despite the pressure, SpaceX delivered strong second-quarter results. Revenue surged 92% year over year to $7.8 billion, beating expectations of about $6.9 billion. Adjusted EBITDA jumped 191% to $3.5 billion, while the net loss narrowed to $541 million from roughly $1 billion a year earlier.
Starlink continued to drive growth, generating $4.29 billion in connectivity revenue and reaching 12 million subscribers after adding 1.7 million users during the quarter. The company’s AI segment contributed $2.56 billion in revenue, while its space operations generated $962 million.
However, capital expenditures climbed to $18.3 billion, including $15.8 billion dedicated to AI infrastructure, a figure that initially weighed on investor sentiment.
At the same time, sentiment improved during the first week of August after the expiration of a major lockup period failed to trigger the heavy selling many investors had expected.
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Space Exploration Technologies' (SPCX +15.83%) second-quarter earnings have come and gone, sparking much intrigue among investors.
SpaceX posted strong revenue growth and a narrowing of its operating loss compared with past quarters. However, huge capital expenditures of roughly $18.4 billion in the quarter drove the stock down during the day following earnings.
Still, much of the interest beyond the numbers came from SpaceX's earnings call, where Wall Street analysts sought further insights into the company's future from CEO Elon Musk and the rest of the senior management team. Among other tidbits, Musk said this could be the most underappreciated part of SpaceX's business.
SpaceX CEO Elon Musk. Image source: White House.
Manufacturing on the moon What SpaceX has already accomplished is a tremendous technological achievement, whether you think about what the company is doing with artificial intelligence or its low earth orbit satellite internet network, Starlink.
But if you've read SpaceX's registration statement, the company has even greater ambitions that seem straight out of a science fiction novel or television show. For instance, Musk's compensation package and incentives are partly tied to efforts such as establishing large-scale settlements on Mars and mining asteroids.
This ties back to a potential area of SpaceX that Musk believes is underappreciated: robotics. Now, robotics is not a new concept, and many believe it could be the next major innovation, particularly regarding humanoid robots, which Musk's other company, Tesla, is actively developing.
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While they may be used differently than at Tesla, Musk sees robotics at SpaceX in the form of all of the company's satellites, which power Starlink and could, in the future, support orbital data centers for AI compute.
Musk said that all of SpaceX's satellites can be thought of as robots:
They're autonomous, and they do not need servicing. In the sort of what may seem the far future but will come faster than you think, using robots on the Moon to scale up manufacturing on the Moon, which I know sounds like super sci-fi right now -- but it's going to happen -- will enable us to build the mass accelerator on the Moon. If you have a mass accelerator on the Moon, and you have solar and radiator production on the Moon, you can -- I know this sounds totally nuts -- but you can probably scale to 1,000x the economy of Earth in terms of intelligence launched to space. Probably maybe even a million times. We are going to land a lot of tonnage on the Moon. We're going to build the factories on the Moon. The robots will be helpful with that.
SpaceX's president and chief operating officer Gwynne Shotwell added that she expects robotics to dramatically increase demand for connectivity and therefore for Starlink, which Musk believes will deliver the majority of the world's internet one day.
Investors should try to stay grounded When an entrepreneur as accomplished as Musk starts talking about building factories on the moon, it can be easy to get carried away and go all-in on the stock. But investors should do their best to stay grounded. While Musk may very well accomplish what he says, it will be quite difficult for retail investors to figure out what is and isn't technologically possible.
After all, Musk has been talking about humanoid robots and fully autonomous self-driving at Tesla for years. While he's certainly made progress, I don't think it's quite there yet, and who knows what timeline it will be accomplished on, if ever.
Investors should continue to keep SpaceX positions smaller and more speculative for now. Continue to gather information and let the lock-up provisions expire over the rest of the year before buying more shares.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Listen to the audio version of this article (generated by AI).
The AI story most investors have been watching is about chips.
Our macro investment expert Eric Fry thinks the next chapter is about memory.
In today’s Friday Digest takeover, Eric explains why comments from SpaceX’s first earnings call may have revealed one of the AI boom’s biggest emerging bottlenecks – and why the companies helping solve that problem could be among the next generation of winners. He also highlights one stock already benefiting from this trend and explains why he believes Wall Street is still underestimating the opportunity.
If you’d like to dig deeper, Eric expands on this idea in his free Market Shock presentation, where he outlines his full “AI Golden Rivets” thesis and shares several additional stocks he believes are well positioned for AI’s next phase. You can watch it right here.
The biggest investment opportunities often emerge when the market realizes it has been focused on the wrong bottleneck. Eric makes a compelling case that we’re approaching one of those moments.
I’ll let him take it from here.
Have a good evening,
Jeff Remsburg
Hello, Reader.
The universe wasn’t supposed to do this.
In 1998, astronomers made a discovery so surprising that it eventually earned three of them the Nobel Prize in Physics.
The expansion of the universe was accelerating.
That flew in the face of decades of scientific thinking.
Ever since Edwin Hubble discovered in 1929 that the universe was expanding, astronomers had assumed gravity would gradually slow that expansion over time. The only real question was how much it had slowed.
To find the answer, scientists turned to extraordinarily distant exploding stars known as supernovae. Because these stellar explosions have a predictable brightness, astronomers can use them as mile markers in space, comparing how bright they should appear with how bright they actually look from Earth.
What they discovered turned conventional wisdom on its head.
Those supernovae were fainter – and, therefore, farther away – than expected. Instead of slowing under gravity’s pull, the universe was expanding at an accelerating rate.
Something scientists couldn’t see or explain was pushing space outward.
Observations from the Hubble Space Telescope – named after Edwin Hubble himself – helped confirm the finding and deepen the mystery. Even today, the nearby universe appears to be expanding roughly 5% to 9% faster than our best models predict.
Now another space-related expansion appears to be accelerating, one with much more immediate consequences for investors.
The global space economy recently reached a record $613 billion. Johns Hopkins researchers expect it to approach $1.8 trillion within the next decade, fueled by reusable rockets, private investment, falling launch costs, and entirely new businesses that would have sounded like science fiction only a few years ago.
And now artificial intelligence is accelerating that expansion even further.
AI is already helping companies design spacecraft, process vast quantities of satellite data, automate missions, and explore the possibility of operating data centers in orbit. Space is no longer merely somewhere technology travels. It may become part of the infrastructure where tomorrow’s most advanced computing takes place.
That brings us to Space Exploration Technologies Corp. (SPCX).
This week, investors received their first detailed look inside the newly public company. The results showed a business evolving far beyond rocket launches and satellite communications and spending staggering sums to become a major force in AI infrastructure.
SpaceX generated $7.8 billion in second-quarter revenue, up roughly 92% from a year earlier. But it also spent nearly $16 billion expanding its AI infrastructure, helping produce a quarterly net loss of $541 million.
Yet when Elon Musk discussed what could limit that expansion, he did not point to SpaceX’s losses, its access to capital, or even the availability of advanced AI chips.
“The limiting factor currently is memory,” Musk told investors.
For investors, that admission may prove far more valuable than anything else in SpaceX’s earnings report.
Because the memory shortage constraining Musk’s AI ambitions is also creating severe supply-and-demand imbalances throughout the technology industry. And the relatively small group of companies capable of supplying that memory could possess exactly what investors should look for during a shortage: surging demand, limited competition, rising prices, and extraordinary pricing power.
Today, I’ll show you why Elon Musk believes memory (not money) is becoming AI’s biggest constraint and how that shortage could reshape the industry.
Plus, I’ll introduce you to one memory company I believe is positioned to benefit… and show you where you can find three more memory-related stocks I’m watching before Wall Street fully catches on.
The Final Frontier’s Biggest Bottleneck When Elon Musk called memory “the limiting factor” for SpaceX’s AI ambitions, he wasn’t talking about some obscure engineering problem.
He was describing a challenge that now confronts virtually every company trying to build the next generation of artificial intelligence.
SpaceX wants to become much more than a launch company. Musk envisions it operating enormous AI data centers, processing data gathered by Starlink’s thousands of satellites, developing autonomous spacecraft, and ultimately creating an AI infrastructure business that extends well beyond Earth’s atmosphere.
But none of that can happen without memory.
Modern AI systems rely on three essential building blocks:
GPUs, like Nvidia’s AI accelerators, which perform the calculations. HBM (high-bandwidth memory), the ultrafast memory attached directly to those GPUs. DRAM (dynamic random access memory), the working memory that allows AI models to “think” in real time. The first bottleneck of the AI boom was compute. Nvidia Corp. (NVDA) became one of the world’s most valuable companies by solving that problem.
That bottleneck has shifted. Now it’s memory.
Large language models don’t simply perform calculations. They must constantly store, retrieve, and manipulate staggering amounts of information while generating each response.
Training a ChatGPT-sized model can require tens or even hundreds of terabytes of DRAM spread across thousands of GPUs. Without enough memory, those expensive AI systems simply wait.
No memory means no intelligence.
That’s why Nvidia CEO Jensen Huang recently warned that the industry’s “memory bottleneck is severe.”
It’s also why tech companies have reportedly stationed employees in South Korea for months at a time, hoping to secure scarce DRAM allocations from Samsung and SK Hynix Inc. (SKHY). The industry has even given these buyers a nickname: “DRAM beggars.”
SpaceX may have been the first company to say it publicly, but it certainly won’t be the last.
One of the Companies Solving the Memory Problem The numbers explain why.
Nearly 100 gigawatts of new AI data centers are expected to come online over the next four years. Yet industry estimates suggest there is enough DRAM supply to support only about 15 gigawatts of new capacity over the next two years.
That imbalance is already driving prices sharply higher. Market researcher TrendForce expects conventional DRAM contract prices to surge 90% to 95% in early 2026, one of the fastest increases the industry has ever experienced.
During SpaceX’s earnings call, Musk added another eye-opening statistic. He expects AI memory demand to grow at nearly 200% annually.
That combination – exploding demand and constrained supply – is exactly the sort of bottleneck I like to look for as an investor.
One company I’ve got my eye on is PDF Solutions Inc. (PDFS).
Unlike memory manufacturers themselves, PDF Solutions helps semiconductor companies produce more usable chips from every manufacturing run. Its software identifies defects, improves manufacturing yields, and helps chipmakers reduce costly failures. Those are capabilities that become dramatically more valuable when every additional AI memory chip commands a premium.
As manufacturers race to increase DRAM and HBM production, companies like PDF Solutions quietly become indispensable behind the scenes.
That’s one reason PDFS has become one of the most interesting memory-related stocks I’m watching.
It isn’t the only one.
Where I Think the Next Winners Will Come From If you’ve followed my work for any length of time, you know I spend very little time chasing whatever Wall Street already loves.
Instead, I look for the bottlenecks.
Years ago, that meant identifying Nvidia before most investors appreciated how valuable AI compute would become.
Last year, it meant recognizing that the AI trade was entering a new phase, one where the biggest gains would increasingly come from the companies supplying what I call AI’s Golden Rivets. Those are the irreplaceable materials, energy, networking, and memory infrastructure every AI company depends upon.
Today, I believe we’re entering the next phase of that acceleration.
Much like the astronomers who assumed the universe’s expansion would gradually slow, I believe many investors are underestimating what’s happening today. They see AI continuing to grow, but they haven’t yet recognized how quickly demand for the infrastructure supporting that growth is accelerating.
And as we’ve already seen with SpaceX, those accelerating demands are beginning to expose entirely new bottlenecks… and entirely new investment opportunities.
In my latest Market Shock presentation, I explain that while the AI Revolution is still in its early innings, the next big winners are unlikely to be the same companies that dominated the last three years.
I’ll also share four memory-related stocks I believe are positioned to benefit from this bottleneck, including three additional names and tickers beyond PDF Solutions that I’m watching very closely.
If you’d like to see the complete framework, and why I believe SpaceX’s earnings call may have revealed far more than Wall Street realizes, you can watch that free presentation here.
Regards,
Eric Fry
Editor, The Speculator
P.S. Eric Fry has spent decades identifying major market shifts before they become obvious. His latest research suggests the next big winners won’t be the companies dominating today’s AI headlines, but the businesses supplying the critical infrastructure the entire industry depends on. If you enjoyed today’s essay, I think you’ll find his free Market Shock presentation well worth your time. In it, Eric explains his full thesis and shares several additional stocks he believes are positioned to benefit from AI’s next phase. Find it here.
Space Exploration Technologies (SPCX), a launch, satellite-connectivity and AI-infrastructure company, jumped over 12% in Friday's regular session after Argus u
SpaceX (SPCX) remained in focus on Friday after one Wall Street analyst reiterated the highest price target on the stock, following the company's stronger-than-
Key Takeaways SPCX fell 24.5% in a month even as Q2 revenues surged 91.9% and its per-share loss narrowed sharply.Starlink subscribers doubled to 12 million, lifting Connectivity revenue 65.8% and operating income 79.4%.AI revenue jumped 247.5%, but heavy capex, operating losses and Starship execution risks weigh on the setup. Space Exploration Technologies Corp. (SPCX - Free Report) shares have fallen 24.5% in the past month even as the company posted rapid second-quarter growth across its three operating segments. The sell-off has reset the share price, but not the investment debate.
Starlink is profitable and AI revenues are expanding quickly. Heavy capital spending, reported losses, Starship execution requirements and a demanding valuation keep the risk-reward balanced.
SpaceX Growth Signals Remain Strong Beneath the SlideSecond-quarter 2026 revenues surged 91.9% year over year to $7.81 billion, beating the Zacks Consensus Estimate by 16.3%. The loss of 9 cents per share was 73.5% narrower than a year earlier and beat the consensus loss estimate of 26 cents.
Growth was broad. Connectivity remained the largest revenue contributor, AI grew the fastest and Space benefited from a more favorable customer launch mix. Consolidated operating loss narrowed to $143 million from $970 million.
Starlink Gives SPCX a Profitable Growth EngineStarlink subscribers doubled year over year to 12 million, helping Connectivity revenues climb 65.8% to $4.29 billion. Operating income rose 79.4% to $1.66 billion, producing a 38.6% operating margin. Adjusted EBITDA reached $2.60 billion.
Consumer revenues increased 44.4% to $2.49 billion and Enterprise & Government revenues more than doubled to $1.81 billion. Connectivity remains the company’s only segment-level source of operating income, giving Starlink a distinct role within the portfolio.
AI Upside Comes With SPCX Spending PressureAI revenues jumped 247.5% to $2.56 billion, driven largely by new cloud-services agreements. Segment adjusted EBITDA swung to positive $1.15 billion from a $276 million loss a year earlier, but the segment still posted a $1.26 billion operating loss under generally accepted accounting principles (GAAP).
AI accounted for $15.83 billion of SpaceX’s $18.37 billion in second-quarter capital expenditures. Management expects total capital spending in each of the next two quarters to remain near the second-quarter level, keeping capital efficiency central to returns.
Starship Keeps SpaceX's Execution Risk ElevatedTwo successful Starship V3 flights in the 90 days before the second-quarter call moved the program forward. Upcoming milestones include deploying V3 Starlink satellites to operational orbit and attempting catches of the vehicle stages, with some steps still subject to regulatory approval.
Starship is designed to quadruple payload capacity and reduce launch costs tenfold versus Falcon 9. Delays in reusability, regulatory clearance or flight cadence could slow launch, Connectivity and future AI deployment plans at the same time.
Valuation Could Limit SPCX's Rebound CaseSPCX trades at 335.4X enterprise value to EBITDA versus 7.2X for its industry, while its 11.8X price-to-book multiple compares with 1.7X for the industry. The wide gaps raise the importance of converting elevated investment into more consistent returns.
Rocket Lab Corporation (RKLB - Free Report) provides launch services and space systems, making it relevant to SpaceX’s launch exposure. AST SpaceMobile, Inc. (ASTS - Free Report) is building space-based cellular broadband, offering context for satellite connectivity. Neither captures SpaceX’s combined launch, broadband and AI mix, which limits clean peer comparisons.
SPCX Signals Favor Patience After the PullbackAfter the pullback, SPCX still presents a balanced setup rather than a clear-cut bargain. Rapid growth remains evident, but valuation, capital intensity and execution are meaningful offsets.
SPCX currently carries a Zacks Rank #3 (Hold), a VGM Score of D, Value Score of F, Growth Score of C and Momentum Score of A. The favorable Momentum Score contrasts with weak value and combined VGM characteristics, while the Hold rank supports patience rather than treating the decline alone as a buying signal.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Takeaways SpaceX added $6.7B of cloud-services revenue over six months, with the ramp starting in October.SPCX AI revenue surged 247.5% to $2.56B as adjusted EBITDA improved to $1.15B from a loss.SpaceX spent $15.83B on AI capex in Q2 as compute capacity rose to 1.4 GW and targets over 2 GW. Space Exploration Technologies Corp. (SPCX - Free Report) contracted another $6.7 billion of cloud-services revenues in early third-quarter 2026, with the six-month ramp scheduled to begin in October. The deal gives investors a near-term measure of how quickly the company can monetize its large AI infrastructure buildout.
The opportunity is substantial, but so is the spending required to supply that compute. Contract durability, customer concentration and the pending Cursor acquisition will help determine whether the latest agreement improves the quality of SpaceX’s AI economics.
SpaceX Adds $6.7B of Near-Term Cloud RevenueThe new cloud agreement covers $6.7 billion of revenues over six months beginning in October. It follows the initial ramp of cloud services at SpaceX’s Colossus and Colossus II sites, adding another contracted stream to the AI segment.
Cloud services give SpaceX a way to monetize installed compute capacity alongside Grok, X subscriptions and advertising. CoreWeave, Inc. (CRWV - Free Report) provides a relevant industry reference because it operates a purpose-built AI cloud platform and has also signed large, multiyear infrastructure agreements with major technology customers.
SPCX AI Revenue and EBITDA Are Already ScalingSecond-quarter AI revenues jumped 247.5% year over year to $2.56 billion. New cloud-services agreements contributed $1.60 billion of incremental AI infrastructure revenues, helping move the segment’s mix toward compute monetization.
Adjusted EBITDA improved to $1.15 billion from a $276 million loss a year earlier, even though the AI segment still reported a $1.26 billion operating loss. The gap shows that adjusted operating leverage is improving while reported profitability remains a work in progress.
SpaceX Is Building Compute Ahead of More DemandNameplate compute capacity reached 1.4 gigawatts at June 30, 2026, up from 0.4 gigawatt a year earlier. Management expects capacity to exceed 2 gigawatts by year-end as it continues expanding AI infrastructure.
That expansion required $15.83 billion of AI capital expenditures in the second quarter, representing most of SpaceX’s $18.37 billion total. NVIDIA Corporation (NVDA - Free Report) is directly relevant to this buildout because SpaceX plans to standardize future compute on NVIDIA’s Vera Rubin architecture, which NVIDIA says is in full production.
SPCX Cloud Contracts Carry Concentration RiskThe cloud model also introduces revenue-quality questions. SpaceX has meaningful customer concentration in AI revenues, so the loss or reduction of a major relationship could affect segment growth and cash generation.
Cloud-services agreements generally may be terminated on 90 days’ notice after their initial ramp periods. That structure makes renewals, customer diversification and continued utilization important when assessing how much recurring value the $6.7 billion contract can ultimately create.
Cursor Could Extend SpaceX's AI MonetizationSpaceX’s pending $60 billion acquisition of Anysphere, the company behind Cursor, would add enterprise software distribution and engineering integration if the transaction closes. Management expects to combine Cursor’s capabilities with its broader AI platform.
SpaceX believes cloud services, Cursor and its other businesses could support more than $100 billion in annualized revenue run rate by December 2026. Reaching that level would require continued execution across infrastructure deployment, customer demand and software integration rather than the new cloud contract alone.
SPCX Scores Reflect Strong Momentum but Mixed QualityThe $6.7 billion agreement strengthens SpaceX’s near-term AI revenue visibility, but high capital spending, contract concentration and reported AI losses keep the economics mixed. The key test is whether the company can sustain attractive returns as compute capacity and contracted demand rise together.
SPCX currently carries a Zacks Rank #3 (Hold), with a VGM Score of D, Value Score of F, Growth Score of C and Momentum Score of A. The Momentum Score points to favorable recent trading characteristics, while the weaker Value and VGM Scores temper that signal. The combination supports a measured stance as the AI buildout moves from capacity expansion toward sustained monetization.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SpaceX (SPCX +11.55%) is still best known for rockets and for Starlink, its satellite internet service. But the second-quarter report it delivered Tuesday (its first as a public company) was largely about something else: selling artificial intelligence (AI) computing capacity.
During the quarter, SpaceX signed Cloud Services Agreements totaling $14.1 billion in contracted sales, nearly twice the $7.8 billion of revenue the entire company produced in the period.
And the buying hasn't stopped. On the earnings call, chief financial officer Bret Johnsen said the company contracted an additional $6.7 billion of cloud services revenue in the first weeks of the current quarter, covering a six-month stretch that starts ramping in October.
The market sold the report anyway. Shares fell about 14% the next day, then rebounded about 6% Thursday to about $115 as of this writing. To me, the drop was less about the quarter than about the stock's price tag. A first slice of the initial-public-offering (IPO) lock-up also expired Thursday, freeing up to 911.5 million shares for sale.
So, at what point does a launch company become a compute company -- and what should investors pay for one in the middle of that change?
Image source: Getty Images.
What the contracts are, and what they aren't The AI segment is where the shift shows up. Its revenue reached $2.6 billion in the second quarter, up 247% year over year. The piece doing the work is the AI solutions and infrastructure line, which jumped to $2.2 billion from $311 million a year earlier -- a sevenfold increase. SpaceX said the new cloud agreements contributed $1.6 billion of incremental infrastructure revenue in the quarter alone.
The segment was at $818 million as recently as the first quarter. Then the contracts started landing, and the figure more than tripled sequentially.
But contracted sales are not revenue. SpaceX defines the $14.1 billion as the value of contracts signed for their non-cancellable period -- dollars to be recognized over time, not dollars already earned.
The release didn't name customers, either. But deals announced around the June IPO give a sense of who's buying. Google, part of Alphabet, agreed to pay $920 million a month for compute from October 2026 through June 2029. And Anthropic agreed to use compute capacity across the company's Colossus and Colossus II data centers.
"Revenue growth accelerated across all our business segments and we delivered strong operating leverage, with significant margin expansion led by our new AI compute agreements," Johnsen said in the release.
What it costs to become a cloud company The build-out behind those contracts is enormous. Capital expenditures for the AI segment were $15.8 billion in the second quarter (more than the entire company's revenue), up from $7.7 billion in the first quarter and just $749 million a year ago.
Computing capacity has more than tripled year over year, to 1.4 gigawatts.
However, the segment still loses money. Its operating loss was $1.3 billion in the quarter, cut nearly in half from the first quarter. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) even turned positive for the first time, at $1.1 billion. But depreciation is the unavoidable cost of a compute business, and $15.8 billion a quarter of spending becomes a very large bill later.
SpaceX can fund it. It ended the quarter with $100 billion of cash and marketable securities, helped by $85.7 billion of IPO proceeds and a $25 billion June bond sale.
Starlink, meanwhile, still pays the bills. The connectivity segment grew revenue 66% year over year to $4.3 billion and produced $1.7 billion of operating income, the only segment at an operating profit.
The ambitions reach further still. Alongside the report, SpaceX announced a partnership with Nvidia to design the Starmind AI1 satellite compute payload, data-center-class computing meant to operate in orbit. Nobody has yet proven a data center in space can work at commercial scale.
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Then there's the price. At about $115 per share, SpaceX is worth about $1.5 trillion, or about 65 times its trailing 12-month revenue of $23 billion. Even against the $100 billion annualized run rate Johnsen said the company is on pace to reach by year-end, that's about 15 times a figure the business hasn't reached yet.
So, is the sell-off a buying opportunity? Not for me. I'll stay on the sidelines.
Sure, the contracted dollars are hard commitments, and the balance sheet can probably carry the spending for a long time. But at about 65 times trailing revenue, the stock arguably prices the compute transformation as a success already, while the segment delivering it still loses money on an operating basis.
The line I'll watch is the AI segment's operating loss. If the new contracts swing it to a profit over the next few quarters, the compute business will have started to prove itself. For now, I'd rather wait.
Key Takeaways Retail investors have remained net buyers of SpaceX since its June IPO. SpaceX's AI ambitions are fueling optimism despite heavy spending and losses. These ETFs offer exposure to SpaceX's long-term growth potential. Retail investors have continued buying SpaceX (SPCX - Free Report) shares every trading day since the rocket company's June IPO, even after its first earnings report triggered a sharp selloff. SpaceX's first major insider lockup expired on Aug. 6, 2026, releasing roughly 911.5 million restricted shares valued at approximately $100 billion.
Shares surged 6.1% on Aug. 6 and added further 2.3% in the premarket session on Aug. 7, 2026. The stock is trading at an average daily volume of about 114 million.
Note that individual investors purchased a net $22.7 million of SpaceX shares during the first hour of Aug. 5's session, according to Vanda Research. That was more than three times the stock's average opening-hour inflow and marked its third-largest opening-hour retail haul across 37 trading sessions, as quoted on Yahoo Finance.
The buying streak remains intact, with SpaceX yet to record a single day of net retail selling since its June 12 debut, Vanda said, per the same Yahoo source.
Retail Enthusiasm Cools But Holds FirmSpaceX surged from its $135 IPO price to an intraday peak of $225.64 on June 16. Since then, the stock has lost more than half its value from that high.
Retail demand has also moderated since the IPO, but investors have remained net buyers. Retail investors purchased about $405 million of SpaceX shares during the first five trading sessions, compared with $103 million over the five sessions leading up to the company's earnings report.
AI Story Drives Long-Term OptimismVanda Research believes retail investors are looking beyond SpaceX's near-term financial results and focusing instead on its long-term AI ambitions, as quoted on Yahoo Finance.
SpaceX is prioritizing long-term growth over near-term cash flow. Despite these risks, CEO Elon Musk projects that SpaceX could generate $1 trillion in annual revenue by 2030, a year earlier than its pre-IPO forecast.
SpaceX's first earnings report as a public company provided support for that narrative. Revenue and adjusted earnings exceeded expectations, while the company highlighted about $16 billion in quarterly spending on AI and data centers (read: SpaceX Beats Q2 Estimates, Shares Fall: ETFs in Focus).
Although the enormous investment raised concerns about the cost of SpaceX's expansion, retail investors appeared to view the spending as an investment in future growth. Notably, SpaceX's AI business posted an operating loss of $1.26 billion in Q2, narrower than analysts' estimate of $2.39 billion.
Revenues from the AI segment came in at $2.56 billion, better than the $2.18 billion expected, according to StreetAccount, as quoted on CNBC.
The Zacks Consensus Estimate calls for a loss of 54 cents per share in 2026, followed by EPS of 66 cents in 2027. One of nine analysts has raised the company's earnings estimate for the ongoing quarter.
ETFs in FocusBaron First Principles ETF (RONB - Free Report) , Roundhill Space & Technology ETF (MARS - Free Report) , VanEck Space ETF (WARP - Free Report) , VanEck Space ETF (ORBX - Free Report) , VegaShares SpaceX & Beyond Earth ETF (XSPC - Free Report) and WisdomTree Space Economy Fund (WSPC - Free Report) are the exchange-traded funds (ETFs) that invest in SpaceX to a significant extent.
Heavy AI investments have been part and parcel of every big AI company, as evident from Big Tech's mammoth AI investment pattern. Hence, we expect investors’ concerns around hefty AI investment to be less likely to hold SPCX shares back for long.
Key Takeaways Starlink revenue rose 65.8% to $4.29B as subscribers doubled to 12M and operating income hit $1.66B.SPCX AI revenue jumped 247.5% to $2.56B, while AI infrastructure drove $15.83B of quarterly capex.SpaceX faces Starship, mobile and valuation risks as it works to turn heavy investment into returns. Space Exploration Technologies Corp. (SPCX - Free Report) combines a fast-growing Starlink franchise, expanding AI monetization and a launch platform built around reusable rockets. Those businesses give the company multiple paths to growth, but they also demand unusually large investments.
The central question is whether improving operating momentum can justify heavy spending and a valuation that already reflects substantial future growth.
Starlink Gives SPCX Its Clearest Earnings SupportConnectivity remains SpaceX’s largest revenue contributor and its only segment generating operating income. Second-quarter 2026 revenues rose 65.8% year over year to $4.29 billion, while operating income increased 79.4% to $1.66 billion.
Starlink subscribers doubled to 12 million and segment adjusted EBITDA reached $2.60 billion. Consumer revenues grew 44.4% to $2.49 billion, while Enterprise & Government revenues more than doubled to $1.81 billion, broadening the earnings base beyond households.
SPCX AI Growth Expands the Upside CaseAI revenues jumped 247.5% year over year to $2.56 billion, driven largely by new cloud-services agreements. Segment adjusted EBITDA turned positive at $1.15 billion from a $276 million loss in the year-ago quarter.
Nameplate compute reached 1.4 gigawatts as of June 30, 2026, up from 0.4 gigawatt a year earlier. SpaceX expects capacity to exceed 2 gigawatts by year-end, giving the company more infrastructure to support AI services.
SpaceX's Capex Cycle Raises the Return HurdleSecond-quarter capital expenditures reached $18.37 billion, including $15.83 billion for AI infrastructure. Management expects spending in each of the next two quarters to remain near the second-quarter level, keeping capital efficiency central to returns.
SpaceX ended June with about $100 billion of cash, cash equivalents and marketable securities. That liquidity provides substantial funding capacity, but the company still reported a $541 million quarterly net loss despite generating $3.54 billion of adjusted EBITDA.
SPCX Valuation Leaves Little Room for Execution MissesTraditional peer comparisons are imperfect because SpaceX spans launch, satellite broadband and AI infrastructure. Even so, its enterprise value to EBITDA ratio of 335.36 and price-to-book ratio of 11.81 indicate a demanding valuation relative to conventional public-market benchmarks.
Rocket Lab Corporation (RKLB - Free Report) , an end-to-end space company providing launch services and space systems, offers context for the launch side of SpaceX’s model. AST SpaceMobile, Inc. (ASTS - Free Report) , which is building space-based cellular broadband for standard smartphones, provides a relevant connectivity comparison.
Starship and Mobile Execution Still Matter for SpaceXStarship remains central to the long-term plan. The vehicle is designed to quadruple payload capacity and reduce launch costs tenfold versus Falcon 9, but SpaceX must still advance reusable operations, regulatory approvals and launch cadence.
Starlink Mobile adds another execution layer. SpaceX plans to integrate 65 megahertz of EchoStar spectrum later in 2027, while next-generation mobile satellites are expected to begin flying in 2027 and commercial service is targeted for year-end 2027.
SPCX Scores Point to a Wait-and-See SetupSPCX offers meaningful growth drivers, but the current setup remains balanced. Starlink profitability and AI expansion are offsets to heavy capital requirements, execution dependencies and a valuation that raises the cost of operating disappointments.
The stock currently carries a Zacks Rank #3 (Hold), along with a VGM Score of D, Value Score of F, Growth Score of C and Momentum Score of A. The favorable Momentum Score contrasts with weaker value and combined VGM characteristics, supporting patience while newer platforms demonstrate more consistent returns.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
As Space Exploration Technologies Corp. (NASDAQ: SPCX) stock surged over 18% this week, defying the fears from the 911.5 million share-unlock, Doug Anmuth, an analyst at JPMorgan Chase & Co. (NYSE: JPM), raised his 12-month target for SpaceX.
Anmuth reiterated a ‘Buy’ rating for SpaceX stock, according to a note to clients analyzed by Finbold on August 7. He further raised the bank’s 12-month price target for SPCX shares to $240 from $225, representing a rise of 6.7%.
With SpaceX shares trading at $128.50 on Friday, the analyst suggests a possible 86.8% upside. The ‘Overweight’ rating for SPCX follows its debut second quarter earnings report, which beat Wall Street analysts’ expectations.
Anmuth argued that the company continues to benefit from extreme vertical integration and the incredibly rapid pace of AI innovation. The bank also raised its SpaceX stock target since the company believes it can achieve an annual recurring revenue of $100 billion, above its 2027 consensus estimate of $75 billion.
The bank also based its higher target on the company’s 2030 revenue forecast of $1 trillion, which is a year earlier than expected. Furthermore, JPMorgan believes that SpaceX can pull forward its modeled AI revenue for 2028 of $100 billion to 2027 due to its higher compute capacity.
SpaceX stock forecast 2026 In addition to JPMorgan, SpaceX stock has received several Buy ratings from Wall Street analysts this week. As such, 31 analysts surveyed by TipRanks have set an average 12-month target of $229.54, signaling a potential 76% upside.
Notably, the highest 12-month SpaceX stock target is $800 while the lowest is $75 at press time.
SPCX price outlook Following the company’s strong debut quarterly earnings report, SPCX shares have surged more than 18% over the past 5 days. As such, the company had a market capitalization of approximately $1.5 trillion at the time of publication.
SPCX stock 5D chart. Source: Finbold With Elon Musk having turned bullish on SPCX stock, as Finbold reported, JPMorgan’s price target could be achieved.
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HomeIndustriesAerospace/DefenseTech StocksTech StocksSometimes stocks come under pressure once insiders are able to unload shares, but in the case of SpaceX, that risk may have been already priced inAug. 7, 2026, 12:54 p.m. ET
SpaceX is having its best day in weeks now that an overhang has been lifted.
The first of several tranches of SpaceX shares SPCX held by insiders was unlocked on Thursday, making up to 911.5 million shares eligible for sale and marking the first chance for some shareholders to cash out on their stakes. While some investors had been preparing for a potential selling event, SpaceX’s stock actually did the opposite.
About the Author
William Gavin is a tech reporter for MarketWatch. He is based in New York.
A SpaceX Falcon 9 rocket carrying Starlink satellites leaves a trail above Pasadena, California. Mario Tama/Getty Images An analyst is throwing cold water on Starlink's ambition to become a mainstream mobile carrier.
In a recent earnings call, SpaceX President Gwynne Shotwell said she expected Starlink to provide better service than the Big Three wireless carriers — AT&T, Verizon, T-Mobile — by the end of 2027.
Benedict Evans, a former Andreessen Horowitz partner who spent decades studying mobile technology, however, said complications with providing service in urban areas would likely stymie such a plan.
"The hard part is having coverage in a city with steel and concrete blocking every signal past 50 yards," Evans wrote on Threads on Thursday. "That's the cost."
Starlink Mobile acts mostly as a satellite safety net for phone carriers. The company's satellites operate like cell towers in space, connecting phones when on-the-ground service is unavailable, including in remote areas or emergency situations.
The service has emerged as the most profitable revenue stream for Elon Musk's companies, netting them a cool $1.66 billion in Q2.
To expand Starlink's coverage beyond remote areas, Musk said on the earnings call that he expected Starlink to deploy "a large number of small stations" in lieu of large cellular base stations.
In his Threads post, Evans said the number of small stations Starlink would have to build would likely cut into the service's vital profitability.
"Can you save enough money from using satellite for rural and for backhaul on some (how many?) of your base stations to deliver a meaningful cost advantage," he said. "What's the algebra?"
Evans attached a graph in a separate Threads post on Friday, showing that most monthly internet traffic is generated from users in urban and suburban areas, where Starlink would have to either build new infrastructure or rent from existing companies.
Starlink did not immediately respond to a request for comment.
Read next
Truman Dickerson is the Weekend News Fellow at Business Insider, based in New York City. He covers trending tech and business news. He previously reported for The Boston Globe's Express Desk. He graduated from Boston University, where he served as editor in chief of The Daily Free Press, BU's student-run newspaper.Contact him at [email protected]
SpaceX's lightning-fast entry into the Nasdaq-100 triggered billions in automatic buying by index funds, and the retirement savers who got swept along had no say in the matter. What happened next reveals an uncomfortable truth about passive investing that most 401(k) holders never consider.
SpaceX, aka Space Exploration Technologies Corp., is rated Buy, with conviction in its long-term infrastructure dominance and early-stage optionality despite high valuation multiples. Starlink's profitability, early AI monetization, $100B liquidity, and $47.5B backlog underpin SPCX's near-term financial strength and expansion visibility. Valuation remains demanding at 46x annualized Q2 revenue and 103x adjusted EBITDA, but forward PEG and P/E ratios are not excessive for SPCX's growth profile.
SpaceX (SPCX) is drawing investor attention after more than 911 million previously restricted shares became eligible for trading following the expiration of the
SpaceX stock SPCX climbed on Friday, putting the stock on track to snap a four-week losing streak after stronger-than-expected quarterly results prompted analysts to raise revenue forecasts.
Shares of Elon Musk's rocket and AI company rose about 11% to $126.82 in early trading.
Despite the week's rebound, SpaceX shares remain well below their post-listing highs.
The broader market also advanced after weaker-than-expected US employment data strengthened expectations that the Federal Reserve could leave interest rates unchanged.
The S&P 500 rose 0.3%, while the Nasdaq Composite gained 0.8%. The Dow Jones Industrial Average added 67 points, or 0.1%.
The major indexes were also headed for a second consecutive weekly gain.
The S&P 500 was up more than 3% for the week, while the Nasdaq was on pace for its strongest weekly performance since April, supported by a rebound in semiconductor stocks.
The iShares Semiconductor ETF had gained more than 7% during the week.
Friday's advance left SpaceX shares up roughly 15% for the week after the company reported stronger-than-expected second-quarter results.
SpaceX reported second-quarter revenue of $7.8 billion and earnings before interest, taxes, depreciation, and amortization (EBITDA) of $3.5 billion, exceeding Wall Street expectations of $6.8 billion in revenue and $2.1 billion in EBITDA.
Following the earnings release, analysts raised their long-term forecasts.
According to FactSet, consensus estimates for 2027 revenue have increased to about $102 billion from roughly $72 billion at the end of July.
The earnings report also prompted several analysts to revise their outlooks for the company.
Bernstein SocGen Group raised its price target on SpaceX to $248 from $239 while maintaining an Outperform rating.
The firm said the higher target reflected increased revenue assumptions and improved pricing expectations for the company's AI computing business following the second-quarter results.
Bernstein noted that SpaceX had accelerated its target to reach $1 trillion in annual revenue by 2030, one year earlier than previously projected.
According to the firm, the revised outlook is driven primarily by stronger pricing for compute services and a more aggressive terrestrial AI expansion rather than higher launch activity for planned orbital data centres.
The firm also said SpaceX has finalized the design of its orbital data centres and intends to monetize terrestrial AI capacity at between $30 and $50 per watt.
Thursday marked the first major expiration of SpaceX's post-IPO lock-up restrictions, allowing rank-and-file employees and some early investors to sell up to 911.5 million shares.
The newly eligible shares more than doubled the company's public float, adding to the roughly 639 million shares previously available for public trading.
Additional lock-up restrictions are scheduled to expire over the coming months, increasing the proportion of potentially tradable shares to about 40% of the company by December 8.
The remaining 60%, including Musk's stake, will remain locked until mid-2027.
The lock-up expiration comes after a sharp post-earnings decline, when investors reacted to elevated AI spending and continuing operating losses.
Although SpaceX has underperformed the broader technology sector since its June listing, analysts continue to maintain a constructive long-term outlook as the company expands its AI computing and satellite businesses.
SpaceX (SPCX) is a binary bet, with potential for explosive upside or severe downside based on AI execution and sentiment. Q2 revenue rose 92% YoY to $7.81 billion, but massive $15.8 billion AI capex casts doubt on capital efficiency and future returns. Starlink is the only profitable segment, while AI's path to $100 billion ARR by year-end is uncertain and critical to valuation.
Top Wall Street analysts changed their outlook on these top names. For a complete view of all analyst rating changes, including upgrades, downgrades and initiations, please see our analyst ratings page.
BTIG analyst Ryan Zimmerman upgraded AVITA Medical Inc (NASDAQ:RCEL) from Neutral to Buy and announced a $7 price target. AVITA Medical closed at $4.75 on Thursday. See how other analysts view this stock. JP Morgan analyst Bryan Smilek upgraded Etsy Inc (NYSE:ETSY) from Neutral to Overweight and boosted the price target from $85 to $100. Etsy shares closed at $82.26 on Thursday. See how other analysts view this stock. B of A Securities analyst Omar Dessouky upgraded Unity Software Inc (NYSE:U) from Neutral to Buy and raised the price target from $30 to $50. Unity Software closed at $40.81 on Thursday. See how other analysts view this stock. Raymond James analyst Andrew Marok upgraded PubMatic Inc (NASDAQ:PUBM) from Market Perform to Outperform and announced a $22 price target. PubMatic shares closed at $13.48 on Thursday. See how other analysts view this stock. Argus Research analyst Steve Silver upgraded SpaceX (NASDAQ:SPCX) from Hold to Buy and announced a $160 price target. SpaceX shares closed at $114.92 on Thursday. See how other analysts view this stock. Considering buying U stock? Here’s what analysts think:
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Jim Cramer is telling investors to consider buying one of the market’s most battered recent IPOs for people who may not need the money for decades: their children.
SpaceX stock NASDAQ:SPCX has nearly halved from its June peak as investors question the sums Elon Musk plans to spend on artificial-intelligence infrastructure.
The stock rebounded 6.1% to $114.92 on Thursday as 911.5 million insider shares became eligible for trading, but remained below its $135 IPO price.
Cramer’s argument on CNBC is deliberately long-term.
Starlink, Starship, AI and orbital computing could become businesses whose scale cannot be judged from the next earnings report. The harder question is why investors should buy that future now.
SpaceX’s first public earnings showed why the long horizon matters.
Second-quarter revenue rose about 90% from a year earlier to $7.8 billion, while the company posted a $541 million net loss.
Capital expenditure reached $18.4 billion, with AI infrastructure accounting for much of the increase.
The investment case rests on several businesses developing together, like Starlink becoming a larger communications platform, Starship cutting launch costs, AI services generating revenue and Musk eventually commercialising computing infrastructure in orbit.
Oppenheimer reiterated an Outperform rating and $250 target after earnings, despite calling elevated capital spending a major concern.
Its analysts now expect SpaceX to reach $1 trillion in annual revenue by 2032, three years earlier than previously forecast, arguing that the company has historically excelled at execution.
Bank of America maintained a Buy rating, $235 target and expects SpaceX’s AI operation to generate about $24.5 billion of revenue in 2026.
The bank noted that the second-quarter report made it more positive on the company’s positioning.
Morgan Stanley retained an Overweight rating and $300 target. It raised its 2026 revenue forecast to $45 billion to $48 billion and expects $91 billion to $102 billion the following year.
Bernstein analysts led by Douglas Harned said they saw nothing fundamentally negative in the earnings report, suggesting the insider-share unlock probably contributed to the sell-off.
Thursday’s rebound supported that view. SpaceX rose even as more than 900 million shares became eligible for sale, suggesting part of the feared supply pressure was already priced in.
The bullish forecasts come with extraordinary spending assumptions.
Morgan Stanley lifted its capital-expenditure estimate to $64 billion for 2026 and $163 billion for 2027 as SpaceX accelerates its computing buildout.
Revenue growth may therefore remain accompanied by heavy financing needs for years.
Piper Sandler kept a Neutral rating and cut its target to $140, warning that lockup expirations could remain a valuation headwind until summer 2027.
It also noted that lucrative AI-cloud contracts can be cancelled, making their staying power difficult to assess.
Morningstar analyst Nicolas Owens offers the hardest challenge to Cramer’s thesis.
He values SpaceX at $62 a share and argues that the market price assumes highly optimistic outcomes for rapid Starship reusability and orbital data centres.
Elon Musk's Space Exploration Technologies (SPCX +6.14%) went public on June 12. SpaceX stock quickly rallied to a record high of $225, but it has since lost 50% of its value and is trading at about $110 (as of Aug. 6).
SpaceX has the potential to create tremendous long-term value for shareholders through its rocket launch, satellite internet connectivity, and artificial intelligence (AI) businesses, but its stock is plummeting right now for a perfectly logical reason: valuation.
Here's one reason investors might want to buy the recent dip and one reason to steer clear.
Image source: Getty Images.
The reason to buy SpaceX stock: A $28.5 trillion addressable market SpaceX believes it has a $28.5 trillion opportunity across its three core businesses, broken down as follows:
Space transportation: $370 billion. SpaceX currently uses its Falcon 9 and Falcon Heavy reusable rockets to launch commercial payloads into space on behalf of other businesses. Satellite connectivity: $1.6 trillion. The company launches its own Starlink satellites into orbit, which provide internet connectivity to paying customers here on Earth. Artificial intelligence: $26.5 trillion. SpaceX acquired a series of AI data centers when it bought Elon Musk's xAI start-up earlier this year. It uses them to further develop the Grok AI models, but it also rents spare capacity to other businesses for lucrative fees. On the space transportation side, SpaceX currently launches about 2,500 tons worth of commercial payloads per year into orbit using its Falcon rockets, which already gives the company a market share of almost 90%. But Musk thinks SpaceX will eventually launch between 1 million and 10 million tons per year into orbit, as companies race to send advanced satellites and even AI infrastructure into space. This presents the market leader with a huge opportunity.
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Connectivity is currently SpaceX's largest business by revenue (which I'll discuss further in a moment). As of June 30, Starlink satellites were beaming internet access to 12 million paying customers, double the 6 million people who were using the service at the same time last year. The company will begin launching its V3 Starlink satellites into orbit later this year, which offer 10 times the bandwidth of its current V2 satellites. This could accelerate uptake among businesses and consumers.
But SpaceX's biggest opportunity could be in AI, spanning infrastructure, consumer subscriptions, and enterprise applications. The infrastructure piece is the most compelling, in my opinion, because SpaceX recently signed several multibillion-dollar deals to rent computing capacity from other AI companies, including Anthropic, Alphabet, and Reflection AI.
Using a variation of Nvidia's new Vera Rubin computing systems, SpaceX will soon host AI infrastructure in space using a new kind of satellite called Starmind. It will beam data back to Earth via the existing Starlink satellite network, so the company is miles ahead of any competitors trying to enter this part of the AI market, as it already has distribution infrastructure in place.
The reason to avoid SpaceX stock: Valuation SpaceX generated $7.8 billion in revenue during the second quarter of 2026, which was a whopping 92% increase from the year-ago period. It was broken down as follows:
Segment
Q2 Revenue
Revenue Growth (Year Over Year)
Space
$0.96 billion
29%
Connectivity
$4.29 billion
66%
AI
$2.56 billion
247%
Data source: SpaceX. Table by author.
While connectivity was SpaceX's largest business by revenue, AI is rapidly closing the gap. In fact, the company recently signed a series of contracts to rent computing capacity to other AI developers worth $6.7 billion over six months starting in October -- on top of its existing revenue.
The AI business is growing so fast that SpaceX Chief Financial Officer Bret Johnsen believes it could reach a $100 billion annual revenue run rate by the end of 2026. If that happens, the valuation problem I'm about to highlight might not be a problem.
Right now, SpaceX's trailing-12-month revenue is just $23 billion. Against a market capitalization of almost $1.5 trillion, that translates to a price-to-sales (P/S) ratio of 65. That makes SpaceX 10 times more expensive than the Nasdaq-100, which has a P/S ratio of 6.4, so it's heavily overvalued from that perspective.
But SpaceX's forward P/S ratio could be as low as 10 if we assume the AI business will generate $100 billion in revenue in 2027 and the space and connectivity businesses deliver modest growth. That valuation looks more reasonable, but investors who buy the stock today have to believe the AI forecast will actually come to fruition. Not even Alphabet's Google Cloud has generated $100 billion in annual revenue from renting AI capacity yet, and it's one of the biggest names in the business.
As a result, SpaceX's valuation might be one reason to wait on the sidelines for a few more quarters as the AI story unfolds.
Space Exploration Technologies (SPCX +6.14%) reported solid Q2 results, but aggressive capex plans and a looming share lock-up expiration sent its shares spiraling. After a strong debut in its June IPO, SpaceX stock has since struggled to find its footing, falling below its IPO price.
Let's take a closer look at its results and prospects and why I think the stock could have further to fall.
Image source: The Motley Fool.
Starlink shines while big promises are made In Q2, SpaceX saw its revenue soar 92% to $7.81 billion, while its net income improved from a loss of $1 billion to $541 million, or $0.09 per share. That easily outpaced analyst expectations for a $0.26 loss on $6.93 billion in revenue.
Starlink, the company's satellite internet service, was a standout in the quarter. Revenue in its Connectivity segment climbed 66%, while its operating income surged 79%. Starlink subscribers doubled year over year and were up 17% sequentially.
The company, meanwhile, said it planned to take on wireless carriers in the U.S. as soon as next year using the spectrum it acquired from EchoStar. However, there appear to be major flaws in this plan.
First, it only acquired 65 megahertz of wireless spectrum from EchoStar, which is a fraction of what the big U.S. providers have. Meanwhile, since satellite signals struggle to penetrate thick concrete, brick, metal, and low-emissivity glass in modern buildings, satellite doesn't work well in urban and dense suburban areas. This would mean the company would need to target massive capex on terrestrial infrastructure, chasing an industry that commands very low P/E multiples.
Revenue from artificial intelligence, meanwhile, surged from $737 million to $2.561 billion, while its operating loss improved from $1.52 billion to $1.26 billion. SpaceX's AI capex in the quarter soared from $749 million a year ago to $15.8 billion. However, the company claimed that on the AI compute side, it's seeing a payback period of less than one year on its capex. This is likely due to the high-priced deals it signed with cloud computing companies for overflow business, as these companies appeared willing to make unfavorable short-term deals to keep customers. As such, these economics may not be sustainable long term, especially since the company pledged to use only high-priced Nvidia systems.
Its space segment, home to its reusable rocket and launch service business, saw revenue jump 29% to $962 million. However, the segment's operating loss increased from $369 million to $542 million.
After the largely successful 13th test flight of Starship, SpaceX plans to catch the ship with the tower pending regulatory approval. Musk said he expects the pace of flights to increase rapidly in the coming year to the point where it will be doing at least one a day, possibly more. He also claimed the company would start building factories on the moon.
Meanwhile, the company is teaming up with Nvidia to meet its space computing needs and build a new fleet of AI satellites called Starmind AI1. The question remains, though, if the companies can build chips that can withstand cosmic radiation and solve the major technical hurdle of cooling systems in the vacuum of space. Whether this is feasible or not, Nvidia is happy to become the sole supplier of chips.
Given its big ambitions, SpaceX has burned through a massive amount of cash so far this year. Over the first six months of the year, the company generated operating cash flow of $3.5 billion, while it had negative free cash flow of $25 billion after $28.5 billion in capex. It ended the quarter with $100 billion in cash after raising $85.7 billion in net proceeds from its IPO.
Looking ahead, SpaceX projected it would reach $100 billion in annual recurring revenue (ARR) by year-end, including its acquisition of AI coding platform Cursor. It said it has $6.7 billion in additional cloud service revenue that will be ramping up starting in October.
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More potential downside ahead While SpaceX turned in solid results, it is still a company trading at a forward price-to-sales (P/S) multiple of nearly 40 times whose ambitions will require a ton of future capex. It could easily have a decade of cash outflows ahead, requiring significant debt and equity raises with no guarantee that its ambitious plans will ever bear fruit. Meanwhile, in the near term, the stock will see a continued wave of new share supply hitting the market as lock-ups expire throughout the year.
Though SpaceX (NASDAQ: SPCX) stock’s time as a public company has not, by press time on August 7, been triumphant, Elon Musk himself appears to believe that recent lows represent an ‘insane opportunity.’
Specifically, early on August 3 and about a day before the company unveiled its first-ever quarterly earnings, an X user going under Gali opined that SPCX trading at $108.37 would eventually prove to have been an ‘insane opportunity’ to buy.
The world’s first trillionaire seemingly agreed, replying with a simple ‘I think so.’
Meanwhile, SpaceX stock ended the latest regular – Thursday, August 6 – session at $114.92 after a 6.14% daily gain.
Considering the move, taking Musk’s word and putting $1,000 in SPCX early on August 3 would have led to $60.44 in profit and a position worth $1,060.44, making it already an ‘opportunity.’
SpaceX stock price one-week chart. Source: Google How much can $1,000 SpaceX stock August investment grow? Still, the original X post made it apparent the user meant $108,37 would have been an excellent opportunity to accumulate for the long term. According to Wall Street’s estimates, the notion might easily be correct.
Should SpaceX stock reach the highest 12-month price target of $800, it would mean that $1,000 purchase turned into a $7,382.12 position. Furthermore, even if it only climbs to the average forecast of $232.11, the investment would have led to a respectable $2,141.83.
Wall Street sets SpaceX stock price target for the next 12 months. Source: TipRanks On the flip side, should Morningstar’s more bearish average target of roughly $70 come true, the $1,000 SPCX share purchase would have turned into a significantly lower $645.94.
Can SpaceX stock hit $800 in 2027? Lastly and unfortunately, it remains somewhat difficult to gauge the more likely scenario for SpaceX stock in the long-run. On the one hand, some of the largest institutions in the world appear to be expecting the company to grow its sales more than a hundredfold in slightly over a decade.
Similarly, Elon Musk himself is certainly vocally confident about his space, satellite internet, social media, and artificial intelligence (AI) company and already oversaw a car manufacturer grow its valuation well above $1 trillion – far above its peers.
On the other hand, SpaceX’s roadmap appears so ambitious that it might be unrealistic – especially once the goals presented in the S-1 are accounted for – and the world’s first trillionaire has both a vested interest and a history of underdelivering.
Finally, the fact that overarching organizations behind Wall Street analysts can simultaneously serve as underwriters might also be clouding their judgement, especially after the SEC relaxed oversight rules in recent years.
A rendering of the SpaceX Terafab semiconductor factory, which it's building in the rural community of Grimes County, Texas. SpaceX Elon Musk is calling it the "most valuable building on Earth by far."
SpaceX on Thursday released several renderings — complete with panoramas and wide angles — of Terafab, the 100-million-square-foot semiconductor factory it's building in rural Texas.
The imaginings, which could change, feature a futuristic, Star Wars-like roadway attached to what appears to be the factory, which itself is split into four massive, rectangular-shaped buildings.
In a press release, SpaceX said the chips the factory plans to produce will be used in space-based data centers and robotaxis.
"Terafab will be epic in both its mission and in its sheer size, designed to build new compute at an unprecedented scale and speed," the company said.
SpaceX said the "initial phase" of Terafab will cost $16.8 billion. Potential future expansions at the site could drive that already jaw-dropping total "much higher," the company said.
Spending such huge amounts on the infrastructure required to power the AI revolution has made many investors, who are still waiting to realize returns on their investments, uneasy. Mega-cap stocks like Google and Meta have seen sell-offs as they continue to spend extravagantly on AI.
In Terafab's case, SpaceX is seeking to establish a reliable chip source — semiconductors are almost entirely produced by a handful of companies in East Asia — capable of handling the massive amounts of compute required by space-based data centers.
SpaceX unveiled new renderings of its massive Terafab chip factory on Thursday. The 100-million-square-foot site is located in rural Grimes County, Texas. Courtesy/SpaceX During a local meeting in Grimes County on Wednesday, Riley Trettel, the factory's lead developer, said SpaceX is "moving nearly immediately to get going on the project."
Jordan Buss, the senior director of environment, health, safety, and medical for SpaceX, said during the meeting that the factory is essential for the United States to compete in the AI race.
"This is something that is strategically vital for the United States, and for, I would argue, Western Civilization," he said. "America faces a clear and urgent challenge with the offshoring of manufacturing."
Nearly 900 residents of Grimes County signed a petition calling for more community oversight of large AI infrastructure projects, like the Terafab facility, that receive public incentives.
SpaceX agreed to pay the county $20 million every year, or about 78% of what it would have paid in property taxes, SpaceX attorney Bucky Brannen said at the meeting.
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Truman Dickerson is the Weekend News Fellow at Business Insider, based in New York City. He covers trending tech and business news. He previously reported for The Boston Globe's Express Desk. He graduated from Boston University, where he served as editor in chief of The Daily Free Press, BU's student-run newspaper.Contact him at [email protected]
SpaceX (SPCX +6.14%) held its first earnings call as a public company on Tuesday, and CEO Elon Musk used it to make an already ambitious goal more ambitious.
The company's internal target for reaching $1 trillion in annual revenue, he said, has moved up a year, from 2031 to 2030. And he put what he called a "non-zero chance" on getting there in 2029.
That is a striking thing to say about a company that produced $7.8 billion of revenue in the quarter it was reporting. It was a strong quarter, to be sure. Revenue grew 92% year over year, and the rocket and satellite company's net loss narrowed to $541 million from $1.0 billion a year earlier.
A target, of course, isn't guidance. But I think this one is specific enough to check against the company's own numbers. So, what growth rate does $1 trillion by 2030 actually require?
Elon Musk. Image source: The White House.
The quarter the new target landed on The second quarter gave the bulls plenty to work with. All three segments grew, led by the artificial intelligence (AI) business, where revenue rose 247% year over year to $2.6 billion on new cloud computing agreements -- the company signed $14.1 billion of contracted cloud sales during the quarter alone. The connectivity segment, home of the Starlink satellite internet service, grew revenue 66% year over year to $4.3 billion and stayed the company's profit center, with operating income climbing 79% to $1.7 billion. Even the space segment, the launch business itself, grew 29% year over year to $962 million.
Starlink ended the second quarter with 12 million subscribers, double the year-ago count and up 1.7 million in three months.
Average Starlink revenue per user, though, was $66 per month, down from $85 a year earlier. Subscriber growth is outrunning pricing, not riding it.
The spending is enormous, too. Capital expenditures totaled $18.4 billion in the quarter (nearly double the prior quarter, and about 6.5 times the year-ago level), with $15.8 billion of that going to AI infrastructure.
The company can afford it, for now. "We ended the second quarter with $100 billion of cash, cash equivalents, and marketable securities, and $47.5 billion in backlog," chief financial officer Bret Johnsen said in the commentary accompanying the second-quarter release, adding that the balance sheet gives the company capacity to keep investing in Starship, Starlink satellites, and its AI platform.
Over the past 12 months, SpaceX generated about $23 billion of revenue. A $1 trillion year in 2030 is about 43 times that figure.
The friendlier starting point is the one management offered. Johnsen said on the call that the company is on pace to reach $100 billion in annualized revenue run-rate by the end of this year.
Take that at face value, and $1 trillion of annual revenue in 2030 still means growing roughly tenfold in about four years. That works out to about 78% compounded annually.
Compare that with what the business is doing today. The company grew 92% in the second quarter, so the required rate is arguably not absurd on its face. But the segment carrying most of the revenue, Starlink's connectivity business, grew 66%.
The only piece growing faster than the target requires is AI. And that growth is running on $15.8 billion of quarterly capital spending against $2.6 billion of segment revenue, with the segment posting a $1.3 billion operating loss.
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Zoom out, and growth rates tend to fall as companies get bigger. SpaceX would need the opposite. It would have to hold a near-80% pace through 2030, while its largest segment grows more slowly than that and its average Starlink customer pays less than a year ago.
Sure, the bull case has hard dollars behind it. The backlog is contracted money, the cloud agreements are signed, and Musk said Starlink could deliver a majority of the world's internet within a decade. If Starship cuts launch costs, the ceiling is hard to estimate.
However, a ceiling isn't a schedule. I think the moved-up date is a stretch goal for Musk's own teams more than a forecast for shareholders. The target only holds if that pace holds companywide -- carried by the one segment that spends far more than it takes in.
I'd watch one number instead: whether annualized revenue run-rate actually approaches $100 billion by year-end, as Johnsen says it should. Hit that, and the 2030 conversation gets more interesting.
4:15pm: Muted closing Wall Street ended Thursday on a softer note, with the Dow Jones Industrial Average pulling back from its record high as rising oil prices and higher Treasury yields dampened investor sentiment.
The Dow fell 464 points, or 0.9%, to 53,885. The S&P 500 slipped 14 points, or 0.2%, to 7,710, while the Nasdaq edged 15 points lower, or 0.1%, to 26,348.
Energy markets were a key focus after oil prices rebounded sharply. Brent crude climbed roughly 3.5% as investors kept a close eye on developments surrounding the reopening of the Strait of Hormuz, fueling concerns about global supply. Meanwhile, gold futures hovered around $4,315 an ounce as investors continued to seek safe-haven assets.
Technology stocks also lost momentum. Software companies and chipmakers came under pressure as investors locked in profits following the sector's strong gains earlier this month.
Attention now turns to another round of corporate earnings due after the closing bell, with reports expected from Airbnb, Cloudflare, Twilio, Atlassian (NASDAQ:TEAM) and Roku. Those results could help set the tone for trading heading into the end of the week.
3:45pm: Proactive news headlines First Phosphate Corp. (CSE:PHOS, OTCQX:FRSPF, FRA:KD0, OTC:FPHOY) received continued support from Noble Capital Markets, which maintained its Outperform rating after the company secured C$4.84 million in federal funding for infrastructure planning at its Bégin-Lamarche phosphate project in Quebec. Fox Tungsten Ltd (TSX-V:FOXT, OTC:HPYCF, FRA:1HC) is advancing its British Columbia tungsten project with an active drilling program, a fully funded treasury of about $15 million and a preliminary economic assessment targeted for the second quarter of 2027. Fineqia International Inc (CSE:FNQ) reported that global digital asset exchange-traded products ended a two-month losing streak in July, with assets under management rising 1.8% to $108.7 billion mainly due to higher cryptocurrency prices rather than new investor inflows. Midnight Sun Mining Corp (TSX-V:MMA, OTCQB:MDNGF) identified multiple new exploration targets beyond the previously drilled mineralized corridor at its Dumbwa copper deposit in Zambia following a high-resolution ground magnetic survey. Alvopetro Energy Ltd (TSX-V:ALV, OTC:ALVOF, FRA:A6Y0) reported higher second-quarter revenue, funds flow from operations and net income as stronger natural gas prices and increased production lifted sales volumes year over year. Nextech3D.AI (CSE:NTAR, OTCQX:NEXCF, FRA:1SS) reported strong growth in customer contracts and contracted value across its Eventdex, Map D and KraftyLab platforms during the first seven months of 2026. Thistle Resources (TSX-V:TRCG, OTC:TRCGF) reported trench sampling results of up to 14.4% antimony and 7.59 ounces of silver per tonne from its Brunswick Antimony Project in New Brunswick. BioVie Inc (NASDAQ:BIVI, NASDAQ:BIVIW) said its Parkinson's disease drug candidate bezisterim met the primary endpoints of a Phase 2 trial, showing improvements in inflammatory biomarkers and multiple clinical outcomes compared with placebo. Domestic Metals Corp (TSX-V:DMCU, OTCQB:DMCUF, FRA:03E0) plans to begin a 9,000-metre diamond drilling program at its Smart Creek copper project in Montana to test multiple high-priority porphyry copper targets. 2:40pm: Market movers AppLovin Corp (NASDAQ:APP) shares plunged more than 20% after the mobile advertising platform reported second-quarter revenue that missed Wall Street expectations despite strong year-over-year growth and earnings that met forecasts. Datadog Inc (NASDAQ:DDOG) shares fell more than 18% as investors focused on slowing bookings growth and weaker third-quarter guidance despite the software company reporting better-than-expected second-quarter revenue growth. SpaceX Corp (NASDAQ:SPCX) shares gained about 2.5% after the expiration of its first major lockup period, which more than doubled the company's public float by making over 900 million insider-held shares eligible for trading. Fiserv Inc (NYSE:FI) shares dropped more than 3% after the payments technology company lowered its 2026 outlook and reported second-quarter adjusted earnings and revenue below Wall Street expectations. Kenvue Inc (NYSE:KVUE) shares slipped about 2% after the consumer health company posted second-quarter results that narrowly missed analyst estimates and reported lower margins than a year earlier. Midnight Sun Mining Corp (TSX-V:MMA, OTCQB:MDNGF) identified multiple new exploration targets beyond the previously drilled mineralized corridor at its Dumbwa copper deposit in Zambia following a high-resolution ground magnetic survey. Western Digital Corp (NASDAQ:WDC) shares declined 11% after the data storage company delivered better-than-expected quarterly results but disappointed investors with a gross margin outlook that fell short of elevated expectations. Sandisk (NASDAQ:SNDK) shares fell nearly 7% after the data storage company issued fiscal first-quarter guidance that came in slightly below Wall Street expectations despite reporting quarterly earnings and revenue that beat estimates. 1:15pm: SpaceX lockup expires SpaceX Corp (NASDAQ:SPCX) (SpaceX Corp (NASDAQ:SPCX)) shares rose about 2.5% on Thursday, despite the expiration of the first major lockup period that made more than 900 million shares held by insiders and other investors eligible to trade.
The release of up to 911.5 million restricted shares more than doubled SpaceX's public float, increasing it from roughly 639 million shares to about 1.55 billion.
The stock had fallen nearly 14% on Wednesday as investors anticipated the potential for increased selling following the lockup expiration.
11:50am: Jobless claims stay low New U.S. labor market data pointed to continued resilience, with initial jobless claims totaling 199,000 for the week ended August 1, below economists' expectations of 205,000, signaling layoffs remain subdued.
Meanwhile, preliminary second-quarter labor productivity rose 1.4% quarter over quarter, more than double the 0.6% increase forecast by economists, suggesting businesses are generating stronger output per worker despite a slowing economy.
11:10am: Applovin sinks Shares of Applovin were down nearly 20% on Thursday morning after last night's top-line revenue miss and softer-than-expected guidance for the upcoming quarter.
AppLovin reported revenue of $1.924 billion for the quarter ended June 30, up 53% from $1.259 billion a year earlier but below the $1.94 billion consensus estimate.
Diluted earnings per share came in at $3.76, matching analyst expectations.
For the third quarter, AppLovin guided for revenue of between $2.055 billion and $2.085 billion, implying continued year-over-year growth. The company expects adjusted EBITDA of $1.71 billion to $1.74 billion, with an adjusted EBITDA margin of 83%.
10:00am: Mixed open US stocks are off to a mixed start on Thursday as investors sort through another busy day of corporate earnings and prepare for more market-moving reports after the closing bell.
The Dow slipped 62 points, or 0.1%, to 54,288 in early trading. The S&P 500 edged up 9 points, or 0.1%, to 7,733, while the Nasdaq gained 45 points, or 0.2%, to 26,409.
Technology stocks are once again driving much of the early action. Sandisk shares tumbled 9% after the memory-chip maker issued guidance that fell short of Wall Street's lofty expectations. Western Digital also moved lower despite posting quarterly results that topped analyst estimates, suggesting investors were focused more on the outlook than the latest earnings.
AppLovin was another notable decliner, with shares plunging 14% after the advertising technology company delivered earnings that disappointed investors.
Meanwhile, SpaceX is attracting attention as its first post-IPO lock-up period expires. Up to 911.5 million shares held by employees and early investors become eligible for sale, raising the possibility of increased volatility.
"SpaceX provides a second source of uncertainty today as its first post-IPO lock-up expires," said Zaheer Anwari, CEO of The Revacy Fund. "As many as 912 million shares held by employees and early investors, valued at roughly $116 billion, will become eligible for sale. That does not mean every share will reach the market, but the potential increase in supply could create further volatility after the stock fell sharply following its first results as a public company."
Looking ahead, investors will be watching several high-profile earnings reports after the market closes, including results from DraftKings, Airbnb and Rigetti Computing, which could set the tone for trading heading into the end of the week.
8:00am: Tech earnings undermine confidence Wall Street was predicted to see a mixed open on Thursday, as another batch of technology earnings undermines confidence and apparent progress towards an Iran deal raises fears of yet another false dawn.
Dow Jones futures were up 57 points, or 0.1%, with the blue-chip index on course to build on the previous session's record close. S&P 500 futures have edged 0.1% higher, while Nasdaq futures were down 0.6%.
AppLovin, Western Digital and SanDisk were leading the pre-market declines, falling almost 19%, 15% and 10%, respectively, after reporting overnight. Bucking the trend, eBay was up 1.4%.
This comes off the back of a mixed midweek session, when the Dow rose 0.5%, but the S&P 500 slipped 0.2% and the Nasdaq fell 0.8%, ending a four-day winning streak.
Investors are also weighing tentative progress over the Strait of Hormuz, where an agreement has been agreed between Iran and Oman. Pakistan said it hoped this would help restart technical talks between Washington and Tehran.
Tehran said the deal was close to completion, but some Iranian sources rejected Donald Trump’s claim that an agreement was imminent and said important details remained unresolved, with questions remaining over control of shipping and Tehran’s demand for the US blockade of Iranian ports to be lifted.
Oil prices were moving higher despite the diplomatic signals, with West Texas Intermediate crude up 1.3% at $76.20 a barrel, suggesting traders remain wary of placing too much faith in the latest round of optimism.
Today’s economic data includes initial jobless claims, second-quarter productivity, unit labour costs and wholesale trade figures.
Market analyst Kathleen Brooks at XTB said the market could be a bit "directionless" as we lead up to some major event risk in the form of Friday’s US jobs report.
"Payrolls are always important, but they are taking on extra significance since the Fed has dropped forward guidance."
She also flagged SpaceX, where shares were more than 2% higher in overnight trading, as it "could attempt a recovery later today", with the stock "worth watching closely" today as it faces a big hurdle with stock lock-ups coming to an end.
"It is also a highly volatile stock, so if it recovers it could be a sign of stronger overall sentiment for the index."
On the corporate front, ConocoPhillips (NYSE:COP, XETRA:YCP), Howmet Aerospace, Datadog and Constellation Energy report before the opening bell, followed by Cloudflare and Monster Beverage after the close.
Josh Taves maintains a bullish outlook for SpaceX (SPCX) pointing to its AI compute business as a huge factor. He mentions the leasing out of its Colossus servers to companies like Anthropic as one revenue stream to watch.
On Aug. 4, Space Exploration Technologies (SPCX +6.14%), better known as SpaceX, released its first earnings report since its June 12 debut (the largest initial public offering in stock market history). It was a good top-line performance from SpaceX, with revenue growing 92% year over year to $7.8 billion.
Starlink carried most of the weight, bringing in nearly $4.3 billion, but all three of SpaceX's segments -- space, connectivity, and AI -- showed growth. Despite the revenue growth, SpaceX's stock dropped around 11% in pre-market trading, largely due to these two red flags worth keeping an eye on.
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SpaceX is spending a lot of money Almost all major tech companies have been spending tons to keep up during the current AI boom, and SpaceX is joining the bunch. In the second quarter, SpaceX's capital expenditures (capex) were $18.4 billion -- a 550% increase year over year and up 82% from Q1.
Of the $18.4 billion, $15.8 billion was spent on its AI segment, building out data centers to increase its compute capacity. On one hand, spending a lot on building out infrastructure isn't inherently bad. CEO Elon Musk believes SpaceX is "building AI compute capacity at scale faster than anyone else."
On the other hand, $18.4 billion is a lot to spend on capex when you're only bringing in $7.8 billion in revenue. It was much more than analysts had expected. And as we've seen with other major spenders (like the "Magnificent Seven" stocks), investors haven't been kind to companies spending a lot without direct, clear monetization.
Image source: The Motley Fool.
SpaceX will likely operate at a loss for a while In Q2, SpaceX had a net loss of $541 million, which was an improvement from the $1 billion it lost in Q2 2025, but still not great. For the first six months of this year, its net loss was $4.8 billion, well above its $1.5 billion in net losses in the first six months of last year.
SpaceX's connectivity segment (Starlink) was its only business that made a profit, with $1.7 billion in operating income (profit from core operations). Its space segment lost $542 million, and its AI segment lost $1.3 billion. Starlink will subsidize the other two businesses for the foreseeable future, which is perfectly fine, but it's worth keeping an eye on how long these losses continue, especially with the high capex not expected to slow down.
SpaceX finished Q2 with $100 billion of cash, cash equivalents, and marketable securities, so it doesn't necessarily have to panic over cash burn right now. But as an investor, you still have time to wait and see how it plays out before rushing to invest.
Pre-market futures are moderate and mixed this morning, following a Hump Day trading session that felt pretty similar. After two days of surging major market indexes — the S&P 500 is up +200 points in the last five trading days — investors seem to be awaiting a new catalyst to push markets along.
Iran is currently striking a peace deal… with Oman, the country that controls the peninsula opposite Iran in the Strait of Hormuz. From this vista, it looks like a double-edged sword: finally parties are discussing a new methodology for keeping the Strait open for shipping 20% of the world’s oil & gas, but they do so with Iran assuming greater control over the international shipping channel. More to come, undoubtedly.
New Jobless Claims Sub-200K AgainThursday morning’s Weekly Jobless Claims continue to demonstrate the most optimistic of all U.S. employment gauges: Initial Claims of +199K is below the +204K anticipated, and basically in-line with the +198K from the prior week. This is the first time the 4-week average new jobless claims has been below +200K since before the Covid pandemic, averaging +196K claims per week over that stretch.
Continuing Claims, at 1.801 million, did cross back over the 1.8M mark for the first time in three weeks, but this is still historically low. Consider that, in 2025 — basically from Easter through Christmas — we saw between 1.9M-1.96M longer-term jobless claims per week, without ever touching the psychologically important +2 million. Again, these show a domestic labor force in very good shape, although “gig economy” options, depending on your state’s unemployment payouts, may be distorting these numbers to a certain extent.
SpaceX Lockup Expires TodayToday, the lockup period for early investors in SpaceX (SPCX - Free Report) , both before and after the company’s IPO on June 12th of this year, expires. How many shareholders will be taking gains on the high-concept (but highly leveraged) rocket and space development giant? We’re talking roughly 900 million shares, by the way, some of which look to book up to 20x gains on their original investment. Shares are flat right now and -18% from their debut ($135 per share at the IPO) to its current +$108.
Space Exploration Technologies (SPCX +2.31%) reported its first financial update as a publicly traded company (for the second quarter) on Aug. 4 amid high expectations. The company's shares rose before it released its earnings report. Unfortunately, the space company's results disappointed the market, sending the stock sharply lower and extending the losses from recent weeks. SpaceX stock is down 20% from its IPO price and 52% from its all-time high. However, even at current levels, the company's shares aren't attractive, in my view. Here are three reasons why I am not buying the dip yet.
Image source: The Motley Fool.
1. SpaceX's massive spending SpaceX's second-quarter results weren't bad. The company's revenue soared 92% year over year to $7.8 billion, while it cut its net loss nearly in half, landing at $541 million for the period, versus the $1 billion reported in the prior-year quarter. However, there are some worrying signs. Notably, SpaceX is spending a small fortune to capitalize on what it perceives as a massive opportunity in artificial intelligence (AI). During the second quarter, SpaceX's capex within its AI business was $15.8 billion, more than doubling quarter over quarter. It was also more than six times the capex in its two other operating segments combined.
Management says it will continue to spend heavily on AI over the next few quarters. That's a problem for the company's near-term performance. The market is punishing other corporations that are also spending heavily on AI, even when they generate significantly more revenue and earnings than SpaceX and also boast attractive opportunities in this market. Perhaps the spending is justified and will eventually transform SpaceX's business. But it's unlikely that we will see a significant return on investment from SpaceX's AI-related spending over the next year, which leads me to believe that the stock may fall further and offer investors who believe in its vision an even more attractive entry point.
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2. Incoming downward pressure SpaceX is acquiring Cursor, an AI start-up, for $60 billion. One noteworthy aspect of this deal is that it is an all-stock transaction. Translation: SpaceX is diluting existing shareholders by issuing new shares to fund this acquisition. It may be worth it in the long run if Cursor can improve SpaceX's AI business, but this transaction may put downward pressure on the stock over the next year or so, especially if many of these new shareholders decide to cash out.
Also, SpaceX's first lockup expiration date is Aug. 6. This refers to a set period after a company's IPO -- the lockup period -- during which company insiders are prohibited from selling their shares. Once it expires, they are free to do so. And if they do in large quantities, it can put downward pressure on the stock. We don't know for sure whether SpaceX's insiders will unload a lot of their shares, but it is yet another thing investors have to factor in before investing in the stock right now.
3. The stock is too expensive Even with robust revenue growth, SpaceX's valuation looks unreasonable, at best. The company's market cap is $1.5 trillion, but it generated just $7.8 billion in quarterly revenue and is not consistently profitable. Every other publicly traded company worth $1.5 trillion or more generates significantly higher sales and is profitable. Another way to see that SpaceX's valuation is too rich is to consider its price-to-sales (P/S) ratio, which is currently an incredible 73.4. The reasonably valued range typically starts below 2. Even granting that SpaceX deserves a significant premium, given its dominance in markets such as space travel and satellite-based connectivity, its P/S is too high.
In my view, the market will eventually correct that and send SpaceX's shares much lower, at which point the stock will be worth serious consideration. After all, SpaceX is developing Starship, a next-gen, fully reusable rocket that could significantly cut space travel costs and allow it to stay ahead of its competitors. It is also building a terrestrial mobile network that could enable it to compete with legacy providers. And that's to say nothing of the company's AI opportunities. The future is promising for SpaceX, but at current levels, the stock is likely to contract over the medium term, as its success seems already baked into the share price. Another 52% drop will make SpaceX a far more attractive investment.
SpaceX (SPCX +2.35%) went public at $135 per share on June 12. Its stock soared to a record high of $225.64 on June 16, but it trades at about $110 as of this writing. Three major issues are driving its stock lower: its sky-high valuation (still at 76 times its 2025 sales), the staggering losses in its AI division, and expectations for its float to roughly triple by December.
Of these three headwinds, the last one is the most unpredictable because it could limit its upside potential as more insiders cash out. Let's see why that's such a major problem.
Image source: Getty Images.
Why will SpaceX's float skyrocket by the end of 2026? SpaceX only sold about 5% of its shares in its IPO. However, it won't bar its insiders, early investors, and large institutional investors from selling their shares with a traditional 180-day lockup period. Instead, it will allow those investors to sell their shares in several waves.
The first wave -- which unlocked 20% of its shares -- occurred on Aug. 6, the second trading day after its second-quarter earnings report on Aug. 4. It will unlock another 7% of its shares on Aug. 20, Sept. 9, Sept. 24, Oct. 9, and Oct. 24. On the second trading day after its third-quarter earnings report, it will unlock 28% of its shares. On Dec. 8, it will unlock all of its remaining shares.
All of those lockup expirations could drive SpaceX's stock lower -- so investors might want to wait for that smoke to clear before buying it as a long-term investment.
Leo Sun has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
SpaceX Corp (NASDAQ:SPCX) shares rose about 2.5% on Thursday, despite the expiration of the first major lockup period that made more than 900 million shares held by insiders and other investors eligible to trade.
The release of up to 911.5 million restricted shares more than doubled SpaceX's public float, increasing it from roughly 639 million shares to about 1.55 billion.
The stock had fallen nearly 14% on Wednesday as investors anticipated the potential for increased selling following the lockup expiration.
The company uses a staggered lockup schedule rather than a standard 180-day restriction, meaning additional blocks of shares will become eligible to trade over time.
SpaceX CEO Elon Musk's stake remains subject to a lockup until June 2027.
The lockup expiration follows SpaceX's first quarterly results as a public company. The company reported a net loss of $541 million, or $0.09 per share, for the three months ended in June, while revenue rose more than 90% year over year to $7.8 billion.
SpaceX also reported a significant increase in research and development and infrastructure spending, including investments related to artificial intelligence and other projects. The higher spending has added to investor concerns around elevated capital expenditures across the technology sector.
Investors are bracing for the next potential hit to SpaceX shares when $101 billion worth of stock becomes available for trading on Thursday with the scheduled ending of a lockup agreement restricting insider share sales. Leen Al-Rashdan reports on Bloomberg Television.
During the second quarter, SpaceX’s Connectivity division—which includes Starlink’s consumer broadband service as well as enterprise, government and Starshield offerings—generated enough operating profit to offset more than 92% of the combined operating losses from the company’s Space and AI businesses.
SpaceX Q2 Earnings Release
In other words, while rockets and AI may represent SpaceX’s long-term growth story, it is Starlink and the broader Connectivity business that are currently helping pay for those investments.
Starlink Profit Is Offsetting SpaceX’s AI and Rocket LossesSpaceX’s Connectivity division generated $1.656 billion in operating income during the second quarter, supported by subscriber growth and expanding enterprise and government demand.
SpaceX Q2 Earnings Release
By comparison, the Space division reported an operating loss of $542 million, while the AI division recorded an operating loss of $1.257 billion.
Combined, the two businesses lost $1.799 billion from operations during the quarter. That means the Connectivity division generated enough operating profit to offset approximately 92.1% of those losses.
After combining all three operating segments, SpaceX reported a companywide operating loss of approximately $143 million.
The figures do not mean Connectivity is directly funding AI and Space dollar-for-dollar. Rather, they illustrate that nearly all of the operating losses generated by those two businesses were offset by profits from Connectivity during the quarter.
Connectivity Has Become SpaceX’s Financial FoundationThe latest results highlight how important the Connectivity business has become to SpaceX’s overall financial model.
Starship remains a capital-intensive development program, while the AI division is investing aggressively in data centers and cloud infrastructure. Both businesses are currently operating at a loss as SpaceX prioritizes growth.
Connectivity, meanwhile, has become the company’s primary source of operating profit.
The business extends well beyond residential Starlink subscribers. It also includes enterprise connectivity, government services and Starshield, giving SpaceX a recurring revenue business that is generating meaningful earnings today while supporting investments in businesses that may take years to reach similar profitability.
During the quarter, SpaceX also secured more than $6 billion in multi-year U.S. government awards through Starshield, reinforcing management’s expectation that enterprise and government revenue will become an increasingly important part of the Connectivity business.
For investors, the latest quarter highlights an important dynamic inside SpaceX. AI and Starship may define the company’s future growth, but today it is the Connectivity business—led by Starlink—that is generating the operating profits supporting much of that journey.
Image via Shutterstock
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SpaceX shares fell on Thursday, as investors braced for a potential bout of insider stock sales that could heap fresh pressure on a company already enduring a bumpy ride since listing.
