Elon Musk outlines ambitious plans for SpaceX despite investor concerns over AI spending #
SpaceX's first earnings report as a publicly listed company failed to reassure investors on Tuesday, with shares falling more than 5% after the company posted stronger-than-expected revenue but revealed far heavier spending on artificial intelligence than markets had anticipated.
As the stock continued sliding during the earnings call, Chief Executive Elon Musk responded not by lowering expectations but by outlining an even grander vision for the company's future, including autonomous robots building factories on the Moon.
The company reported solid second-quarter growth and sharply narrowed its losses from a year earlier. Yet investors largely looked past the headline figures, focusing instead on soaring capital expenditure and the long timeline before Musk's most ambitious plans could generate meaningful returns.
Investors Focus On Spending #
SpaceX generated $7.8 billion (£5.79 billion) in second-quarter revenue, comfortably ahead of analysts' expectations of $6.9 billion (£5.12 billion), while adjusted EBITDA more than tripled from a year earlier. Growth came across its three core businesses: rocket launches, Starlink satellite internet and artificial intelligence.
Despite the earnings beat, shares fell more than 5% after the results were released and continued sliding during the conference call, ending between 6% and 8% lower in after-hours trading.
Musk sought to reassure investors by arguing that SpaceX's internal goal of generating $1 trillion in annual revenue could arrive sooner than previously expected.
'I think people are really underestimating Starlink,' he told analysts. 'It's not out of the question that at some point Starlink will deliver a majority of the world's internet, at least in countries where we're allowed to operate.'
He added there was a 'non-zero chance' the company could reach that target by 2029, ahead of its previous timetable.
Musk's Moon Vision #
Rather than dwell on the share price reaction, Musk shifted attention to SpaceX's long-term ambitions.
He suggested the company's satellites should already be viewed as autonomous robots before describing a future in which robotic systems manufacture infrastructure on the Moon. Those facilities, he argued, could eventually build solar power systems and mass accelerators capable of supporting industrial activity far beyond Earth.
'It sounds super sci-fi right now, but it's going to happen,' Musk said.
He also acknowledged how extraordinary the proposal sounded.
'It's totally nuts,' he admitted, while arguing such technology could eventually support an economy up to 1,000 times larger than Earth's.
The remarks underscored the growing gap between Musk's long-term vision and investors' immediate concerns over profitability.
Capital Expenditure Raises Questions #
Markets instead focused on SpaceX's accelerating investment in AI infrastructure.
The company spent $18.4 billion (£13.65 billion) on capital expenditure during the quarter, including almost $16 billion (£11.87 billion) dedicated to AI computing infrastructure. That exceeded analysts' forecasts of $13.2 billion (£9.79 billion) and marked a sharp increase from the $10.1 billion (£7.49 billion) reported in the previous quarter.
Melissa Otto, Global Head of Visible Alpha Research at S&P Global, said the spending surge largely explained the market's reaction.
'The stock is down because the capex for the AI segment was more than double what was expected,' she said.
SpaceX could also face fresh pressure later this week when roughly one billion insider-held shares become eligible for sale for the first time following the company's June IPO, an event that often weighs on newly listed companies.
Even so, Otto said Musk's revenue ambitions were not impossible.
'It's ambitious and remains a show-me story,' she said in an email following the earnings release. 'However, given the pace of revenue growth and investment this quarter, if the company remains in acceleration mode, it's possible.'
Strong Growth Continues #
Away from the market reaction, SpaceX's operating businesses continued expanding rapidly.
Starlink generated $4.3 billion (£3.19 billion) in quarterly revenue, up 66% year on year, while its subscriber base doubled to 12 million customers. The AI division grew revenue by 247% to $2.6 billion (£1.93 billion), supported by cloud-hosting agreements with Google and Anthropic alongside higher Grok subscription revenue and advertising growth on X.
The company also said it had secured $6.7 billion (£4.97 billion) in cloud-services agreements for the second half of the year and now operates 1.4 gigawatts of AI computing capacity, compared with 400 megawatts a year ago.
Meanwhile, the rocket business generated $962 (£713.56 million) million in quarterly revenue. Musk said Starship could eventually launch as frequently as once a day within roughly a year, arguing that dramatically lower launch costs would underpin future growth by enabling larger satellite networks, orbital data centres and, ultimately, lunar manufacturing.
For now, however, Wall Street appears more interested in whether today's record investment can produce tomorrow's profits than in Musk's vision of Moon-based factories. Tuesday's results reinforced that SpaceX remains one of the world's fastest-growing technology companies, but investors made clear they want evidence that the financial returns will arrive well before the robots do. © Copyright IBTimes 2025. All rights reserved.