SpaceX’s first earnings report as a public company delivered a split verdict: booming sales and faster Starlink growth on one side, heavy AI spending and investor skepticism on the other.

Revenue reached about $7.8 billion in the second quarter, well above analyst expectations, while the net loss narrowed to $541 million from roughly $1 billion a year earlier. Connectivity led the performance, with Starlink revenue reaching $4.3 billion as subscribers doubled to 12 million. Space and AI also exceeded forecasts.¹

That growth gives SpaceX a stronger operating story than its losses alone suggest. Elon Musk argued that Starlink could eventually deliver most of the world’s internet, while executives presented the company’s rocket, satellite and AI businesses as mutually reinforcing engines of expansion. Musk also promised that SpaceX would achieve $100 billion in annualized recurring revenue by December if a planned acquisition closes.²

Wall Street, however, appeared less interested in long-term promises than in the cost of reaching them. Capital expenditure surged more than sixfold to $18.4 billion—more than twice quarterly sales—with more than 80% directed toward artificial intelligence. The AI unit generated $2.56 billion in revenue but posted a $1.26 billion operating loss, intensifying questions about whether SpaceX is building profitable technology or simply renting out expensive computing capacity.

CFO Bret Johnsen said the spending would pay back in less than a year, citing new cloud agreements with Google, Anthropic and Reflection AI. But that argument failed to reassure investors: shares fell as much as 8% after hours and remained below the $135 IPO price. One analyst said investors wanted evidence of near-term value rather than “promises about the next five years or a mission to Mars.”¹

The bullish interpretation points to substantial growth and ambitious engineering milestones. The skeptical one points to negative free cash flow, legal exposure tied to data-center operations and a coming release of more than 900 million locked-up shares. As one market analyst put it, the earnings report offered positives, but heavy capital spending may not suit a market increasingly wary of long-term risk.³