SpaceX Shares Fall 8% as Investors Question AI Spending

Shares of SpaceX tumbled Wednesday even as the company reported stronger-than-expected results in its first public quarterly earnings report, with investors questioning the rocket maker's accelerating investment in artificial intelligence.

The stock fell $10.06, or 8%, to $115.27 in early afternoon trading.

SpaceX's earnings report, released Tuesday, disclosed $15.8 billion in AI-related capital expenditures during the second quarter, more than double what it spent in the first quarter. AI-related investments accounted for 86% of the company's overall capital spending from April to June, which totaled $18.4 billion.

Investors are worried that those investments will not be enough to justify SpaceX's $1.5 trillion valuation.

"The entire market is beginning to suspect that the extraordinary spend on AI might not work out for every firm," David Trainer, CEO of the investment research firm New Constructs, told CBS News in an email. "They cannot all be winners, yet they are all spending as if they will be."

Second-quarter revenue of $7.8 billion exceeded analysts' forecasts, and the company narrowed its loss to $541 million from $1 billion a year earlier.

"Elon Musk has a history of overpromising, so investors took some of the optimistic forecasts with a grain of salt," said Jay Ritter, an IPO expert and professor at the University of Florida's Warrington College of Business.

On Wednesday's earnings call, Musk said: "We're building AI compute capacity at scale faster than anyone else, we believe, and we're significantly improving our AI models, most notably with the release of Grok 4.5 last month."

Ritter said the company was optimistic about launching orbital data centers as early as next year, but added that "the bad news is that the company is spending lots of cash on Earth-based data centers, a business that has a lot of competition."

The company's biggest source of revenue is its satellite division, home to Starlink, though its AI segment could drive the valuation in the future, Morningstar equity analyst Nicolas Owens wrote Wednesday. Morningstar still views the shares as overvalued, he noted.

The stock could face further pressure Thursday, when up to 911.5 million shares become eligible for sale as a lockup period expires.

"The lockup expiration does not mean every insider or early investor will sell, but it does increase the potential supply of shares coming to market, which can create near-term pressure on the stock," said Paul Karger, co-founder and managing partner at TwinFocus.