SpaceX stock falls 8% as first earnings beat is overshadowed by $18B capex

SpaceX just posted its first earnings report as a public company, and it should have been a victory lap. Revenue jumped 92% to $7.81 billion, the net loss narrowed sharply, and adjusted EBITDA nearly tripled. Wall Street had modeled a much uglier quarter. Instead, shares fell more than 8% in late trading. The culprit wasn't the top line — it was the number nobody was quite ready for: $18.37 billion in capital expenditure, more than six times what the company spent a year ago and roughly $5 billion above what analysts had penciled in.

Most of that spending, $15.83 billion, went into the AI business SpaceX inherited when it absorbed xAI back in February. That segment is now growing faster than anything else the company touches, with revenue up 247% to $2.56 billion and $14.1 billion in contracted cloud deals already signed. Compute capacity more than tripled to 1.4 gigawatts as SpaceX keeps building out its Colossus II data center. But the unit still lost $1.26 billion at the operating level, and the company just agreed to spend $60 billion buying Cursor-maker Anysphere, a deal expected to close next quarter. Investors are watching a rocket company turn into one of the largest AI infrastructure spenders on the planet, and not everyone is sure that's the trade they signed up for.

Starlink, meanwhile, keeps doing exactly what it's supposed to do. Connectivity revenue climbed 66% to $4.29 billion, subscribers doubled year over year to 12 million, and the segment's operating income rose 79%. Airlines are piling in too — American Airlines signed on this quarter, joining Southwest, Virgin Atlantic, Iberia and Aer Lingus. Starshield picked up more than $6 billion in government contracts, largely tied to two Space Force awards. Average revenue per user did slide from $85 to $66 a month, a reminder that scale is coming partly at the expense of price.

The original rocket business, oddly, is now the smallest of the three. Space revenue rose 29% to $962 million across 38 launches, but the operating loss widened to $542 million as Starship development costs piled up, with R&D alone hitting $1.08 billion. Starship V3 flew its first suborbital mission in May and completed Flight 13 in July, deploying 20 satellites and relighting a Raptor engine mid-flight — real technical progress, just not profitable yet.

SpaceX ended the quarter sitting on $100 billion in cash, boosted by its record IPO and a $25 billion bond sale, so nobody's worried about runway. What's rattling the stock is timing. A lockup covering hundreds of millions of insider shares expires Thursday, and shares are already down 16% from their first-day close and over 40% from their post-IPO peak. Morgan Stanley's Adam Jonas calls the bearishness overdone; Morningstar's Nicolas Owens expects a wave of selling once early holders are free to cash out. Both can't be fully right, and the market seems to be betting on the latter for now.