Massive capital expenditures have prompted the market to reassess SpaceX's growth narrative. Meanwhile, 912 million shares are set to unlock, effectively doubling the current number of publicly traded shares and immediately intensifying selling pressure from early, low-cost shareholders.
SpaceX's (SPCX.O) first earnings call since its IPO failed to fully alleviate investor concerns. Although the company reported significant revenue growth in its AI business and emphasized that the return on investment in AI infrastructure has exceeded expectations, the market is more focused on whether the AI business can achieve true self-sustainability amid ongoing massive capital expenditures—or whether it will still rely on funding from the Starlink satellite internet business.
After the earnings report, SpaceX's stock closed down 13.61% on Wednesday, erasing approximately $225.2 billion in market value. The "star company," which went public less than two months ago, has seen its stock price decline by about 49% since its June high.
SpaceX Chief Financial Officer Bret Johnsen said the company’s AI business revenue more than tripled year-over-year, with an additional $6.7 billion in cloud computing contracts, and expects to achieve an annualized revenue of $100 billion by year-end. He noted that the payback period for current investments in new computing infrastructure is less than a year, significantly faster than traditional data center projects.
However, the market has not fully embraced this optimistic outlook.
Investors noted that SpaceX's capital expenditures for the second quarter reached $18.4 billion, with approximately $15.8 billion allocated to AI-related investments, representing a significant portion of the $85 billion raised in its June IPO. The company remains in a negative free cash flow position. Analysts believe the key question moving forward is not whether demand for AI exists, but whether these massive investments can be consistently translated into stable cash flows.
David Wagner, portfolio manager at Aptus Capital Advisors, said that Elon Musk’s companies frequently demonstrate strong innovation, but the market has long faced an issue: a gap between the speed of technological implementation and previously promised timelines. “These numbers are not fantasy, but they require flawless execution.”
AI investment returns have become the central market controversy.
Previously, investors generally believed that Starlink’s growing cash flow would be the primary source of funding for SpaceX’s expansion of AI infrastructure. However, in this earnings report, management sought to convey a new message: the AI computing business itself is gradually becoming capable of generating its own financing.
SpaceX stated that AI computing demand still far exceeds supply, and the company expects its computing capacity to exceed 2 gigawatts by the end of the year. If the related infrastructure can maintain high utilization, AI operations may, in the future, support their own expansion.
However, some investors remain cautious.
Josh Gilbert, Chief Analyst at eToro, noted that following recent earnings reports from major tech companies, investors have begun questioning the "unlimited capital investment" model and are demanding proof that expenditures will yield clear returns. SpaceX faces even greater pressure than traditional tech companies, as it is asking shareholders to fund its "space data center" model.
Drew Cupps, portfolio manager at Polen Capital, said the core contradiction in SpaceX’s current model is that capital expenditures must decline, or revenue must grow substantially. “The market is ultimately betting on Musk’s vision, engineering prowess, and execution ability.”
Carolane de Palmas, Market Analyst at ActivTrades, said that amid sustained high capital expenditures and cooling investment enthusiasm, SpaceX’s stock may continue to face short-term pressure as the market reassesses the company’s valuation and cash burn rate.
The first large-scale lock-up expiration is approaching, intensifying selling pressure on the stock supply.
In addition to business model controversies, SpaceX is facing its first major stock lock-up expiration following its listing.
As the first lock-up period expires this Thursday, certain employees and early investors will be eligible to sell their shares for the first time. Concerns have arisen in the market that many early investors, who acquired their shares at costs far below the $135 IPO price, may choose to cash out.
Robert Hackel, CEO of institutional broker R.F. Lafferty & Co., said this is one of the “most closely watched lock-up expirations in IPO history,” as many early investors are considering selling portions of their holdings to invest in other hot, privately held AI companies.
This unlock is drawing particular attention. Approximately 912 million shares of SpaceX will become tradable, potentially more than doubling the current number of publicly traded shares. By mid-next year, additional shares are expected to be gradually released from restrictions.
However, some investors believe that early shareholders may not exit en masse. Gabriel Shahin, founder of Falcon Wealth Planning, noted that some SpaceX employees and insiders he has spoken with remain long-term bullish on the company’s prospects and are not in a hurry to sell their shares.