SpaceX shares drop 9% as Wall Street questions AI spending following first post-IPO earnings

What the earnings showed

SpaceX's first quarterly report as a public company landed with sharply negative market reception. Revenue climbed 92% year over year, but capital expenditures surged more than sixfold to $18.4 billion, more than double total sales for the quarter. The result pushed shares down 9% as Wall Street weighed the spending profile against the growth headline.

The AI unit's drag

The AI segment, built around the Memphis-based Colossus data center, remains unprofitable at scale. It generated $2.56 billion in revenue in the second quarter while posting a $1.26 billion operating loss, following a $2.47 billion loss on $818 million in revenue in the first quarter. SpaceX disclosed a $354 million litigation-loss accrual linked to the unit, including suits over gas-turbine operations without required pollution controls and federal permits.

Management's defense of the capex

CFO Bret Johnsen framed the heavy capital outlay as a fast-converting investment, telling investors that SpaceX contracted an additional $6.7 billion in cloud services revenue over a six-month period beginning to ramp in October. CEO Elon Musk reinforced the message, saying the $100 billion annualized recurring revenue target for December "is not a question mark" and assumes no further action. The forecast depends partly on closing the $60 billion Cursor acquisition.

The contracts underpinning the pitch

The AI revenue case rests on a string of large compute deals. Days before its IPO, SpaceX signed with Google for up to $920 million per month of AI compute capacity. Anthropic previously agreed to pay up to $1.25 billion a month for three years at Colossus, while Reflection AI signed on for up to $150 million a month. Together with new cloud agreements, these contracts are central to management's margin-expansion narrative.

What remains uncertain

The strategy of reselling AI capacity ties SpaceX's near-term results to a market detached from its launch and broader business, creating exposure to the same spending scrutiny facing Alphabet, Amazon, Microsoft and Meta. Whether the contracted backlog converts to recognized revenue on schedule, and whether litigation costs grow, are the open questions driving the post-earnings repricing.