SpaceX's first earnings report since its June IPO revealed a dramatic surge in capital expenditures, primarily driven by artificial intelligence investments, which unsettled Wall Street despite management's assurances of a swift payoff. CFO Bret Johnsen disclosed that capital expenditures soared over sixfold year-over-year to $18.4 billion in the second quarter, with more than 80% allocated to AI initiatives. This figure far exceeded the $13.22 billion average analyst estimate, according to FactSet, and was more than double the company's total sales for the quarter [1].
Despite these heavy investments, SpaceX reported a 92% year-over-year jump in second-quarter revenue, surpassing estimates. The company also announced new cloud services contracts totaling $6.7 billion in the first few weeks of the current quarter, set to ramp up starting in October. Notably, SpaceX inked a deal with Google worth up to $920 million per month for AI compute capacity, a separate agreement with Anthropic for up to $1.25 billion per month over three years, and another with Reflection AI for up to $150 million per month [1].
CFO Johnsen argued that investors should reconsider their view of capital expenditures, emphasizing that SpaceX is achieving less than a one-year payback on AI compute investments. He projected that, assuming the closure of the $60 billion Cursor acquisition, the company is on track to reach $100 billion in annualized recurring revenue by year-end. For context, SpaceX's total revenue in 2025 was below $19 billion [1].
Despite these optimistic projections, the market reacted negatively. SpaceX shares fell 7.5% after hours, erasing earlier gains and leaving the stock more than 20% below its first trade on June 12. The company's aggressive AI spending and ambitious revenue targets have yet to convince investors, who remain wary of the high costs and competitive landscape, where SpaceX lags behind established AI leaders like OpenAI, Anthropic, and Google [1].
CONCLUSION
SpaceX's substantial AI-driven capital expenditures and bold revenue forecasts have failed to reassure investors, as evidenced by a sharp decline in the company's share price. While management touts rapid payback and major new contracts, Wall Street remains cautious about the sustainability and risks of SpaceX's aggressive AI expansion.