The earnings test
SpaceX is set to deliver its first quarterly results as a public company after Tuesday's close, and the report will give the company's limited pool of public shareholders their first chance to assess whether Starlink's earnings can sustain Musk's rapidly expanding AI and space ambitions. The company has not yet released figures, but analysts expect overall revenue of about $6.93 billion for the April–June quarter alongside a loss before interest and taxes of roughly $1.55 billion, according to data compiled by LSEG and Visible Alpha. The backdrop is unusually tense: the stock has pulled back sharply since the June IPO and was trading around $108.37 on Friday, with one outlet tallying a market-cap decline of more than $500 billion since its first trade on June 12.
The AI spending question
Investors are expected to focus on whether Musk's AI build-out can pay for itself. According to the consensus compiled by LSEG and Visible Alpha, AI-segment revenue is projected to nearly triple to $2.33 billion in the second quarter, up from 12.5% growth in the prior quarter, while AI-related capital spending is expected to surge to roughly $10.2 billion, more than six times the year-ago level. Analysts expect total capital expenditure of close to $14.05 billion for the period, on top of the $7.72 billion the AI segment absorbed in the January–March quarter. "Starlink is executing beautifully, but it cannot single-handedly fund a $30 billion annualized AI capex program," said Will Rhind of GraniteShares. Bill Birmingham of REX Financial was even more pointed: "This is not going to be a free cash flow story now, soon, or maybe even ever." Compute agreements with Anthropic, Alphabet's Google and Reflection AI have been signed, and MoffettNathanson analyst Julie Zhu expects the AI business to generate positive core profit this year, helped by infrastructure arrangements, though she cautioned that gains would be tempered by the segment's heavier capital needs.
Starlink's profitability carries the weight
Until the AI unit and Starship launches can stand alone, Musk plans to use Starlink's cash flow to bankroll both ventures, a strategy critics describe as unsustainable. Analysts expect Starlink connectivity revenue of $3.82 billion and operating profit of $1.42 billion for the quarter, up from $1.19 billion in the first quarter. The end-of-March subscriber base stood at 10.3 million, roughly double a year earlier, even as average revenue per user fell nearly 25%. Bloomberg-tracked LSEG data point to Starlink revenue growth accelerating to 52.6% in the quarter, up from 31.6% in the prior period, driven mainly by geographic expansion.
Starship and the long-term case
Bernstein analysts, who carry a $239 price target into the print, identify Starship as the single most important issue for the valuation, alongside semiconductor availability for orbital data-center satellites, regulatory approvals from the FAA, and AI compute capacity. New Street initiated coverage before the IPO with a $165 target. SpaceX has said in its prospectus that Starship is expected to "commence payload delivery to orbit" in the second half of this year, and that failure to achieve full reusability or rapid turnaround could push up per-launch costs, slow orbital-AI deployment and lift overall capital requirements.
Other developments
Separately, SpaceX is close to finalizing a deal to acquire about 130,000 acres of marshland in southern Louisiana, an 18-mile stretch known as Pecan Island that became available through a legal settlement resolving lawsuits blaming ExxonMobil for coastal land loss, according to the Times-Picayune | New Orleans Advocate. The state legislature has already passed an aerospace-incentives package, and SpaceX has said it is "constantly exploring" new Starship launch sites. Investors will also look for Musk's comments on a reported potential merger between SpaceX and Tesla; Musk called last week's media report "fake news," though he had previously declined to rule out a deal. Finally, the post-IPO lock-up period expires on August 6, releasing roughly 930 million shares—worth around $100 billion at current prices—into the market in the days following the print, alongside the pending third-quarter close of SpaceX's agreed $60 billion acquisition of AI-coding startup Cursor.
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