SpaceX released its first earnings report as a public company on Tuesday. The stock fell sharply afterward as investors reacted to a jump in spending.
Shares dropped 13.6% on Wednesday. The stock closed near $125, below its $135 debut price from June.
The company said its capital spending jumped sixfold to $18.4 billion in the second quarter. Most of that money went toward artificial intelligence projects.
Revenue nearly doubled to $7.8 billion compared to a year earlier. Even so, SpaceX reported a net loss of $143 million for the quarter and a $2 billion loss over the first six months of the year.
AI Spending Takes Center Stage
Most of the new spending is going toward building AI computing capacity. The company already has 1.4 gigawatts of compute power ready to use.
Musk said that number should reach at least 10 gigawatts by next year through new data centers. This compute power is sold to other companies working on AI.
The AI business lost $1.2 billion on revenue of $2.5 billion during the quarter. The unit is still losing money as it grows.
SpaceX's chief financial officer, Bret Johnsen, said capital spending will stay at a similar level for the rest of the year. He said the company expects to earn back its AI compute spending within one year.
Starlink Remains The Bright Spot
Starlink was the only part of SpaceX turning a profit. It brought in $1.6 billion during the quarter.
Musk said he expects the satellite internet service to keep growing fast. He said it could eventually carry a large share of global internet traffic.
He pointed out that many parts of the world still lack cable internet access. Starlink can reach those areas through satellites instead.
The company's rocket business, its original core operation, lost $542 million on revenue of $962 million for the quarter.
Musk also updated his long-term revenue forecast. He said SpaceX would hit $1 trillion in annual revenue by 2030, a year earlier than his previous estimate.
Analyst Matt Britzman said Musk's plan could turn the company into an AI infrastructure business with a space unit attached to it. He said analysts are still working out what the company's core identity will be.
Other analysts pointed to mixed signals in the results. Starlink subscriber growth looks strong, but the AI unit is still losing money as spending rises.
Investor Wendy Souvannarath said many large tech companies are spending at similar levels on AI right now. She said SpaceX treats the AI spending as a cost it expects to recover within a year.
The stock remains below its $135 IPO price and well off its high of more than $200, which it hit shortly after trading began on June 12.
SpaceX faces another event on Thursday, when an insider lockup period expires. This will allow early investors and employees to sell shares for the first time since the company went public.
