SpaceX dives 9% after AI spending surge rattles investors

SpaceX shares sank 9% on Wednesday after a surge in artificial intelligence spending rattled investors and clouded an otherwise expectation-beating quarter.

In SpaceX's first earnings report as a public company on Tuesday, Elon Musk 's space firm said its capital expenditures jumped sixfold to $18.4 billion in the second quarter. This figure was ahead of analyst expectations, with the majority of the spending going towards AI.

The company's stock closed at just over $125 on Tuesday, sitting below its $135 IPO price. It is well off its more than $200 all-time high that was hit shortly after its listing.

Investors have been on edge this earnings season as concerns rise about whether large tech companies can prove their multibillion-dollar investments are yielding returns.

While SpaceX's own models are seen as behind OpenAI and Anthropic, the company is positioning itself as an alternative cloud player by renting out the computing capacity that it is building with Nvidia chips.

SpaceX's CFO Bret Johnsen looked to allay investor fears over capex spending. The company has been "efficient" with its spending, he said on an earnings call.

"On the AI compute side, we're able to deploy capital in such a way that we're getting less than a one-year payback," Johnsen added.

The share price fell even as SpaceX narrowed its losses and promised significant future revenue. Musk said SpaceX would hit $1 trillion in annual revenue in 2030 versus a previous forecast of 2031.