{"slug": "spacex-earnings-to-test-if-starlink-can-fund-musks-ai-spending", "title": "SpaceX Earnings to Test If Starlink Can Fund Musk’s AI Spending", "summary": "SpaceX is set to report its first quarterly earnings since its $86 billion IPO, testing whether Starlink's profits can fund CEO Elon Musk's AI spending. Analysts expect the AI business to nearly triple revenue to $2.33 billion in the April–June quarter, while its capital spending is forecast to surge to $10.2 billion. Will Rhind, CEO of GraniteShares, said, \"Starlink is executing beautifully, but it cannot single-handedly fund a $30 billion annualized AI capex program.", "body_md": "**August 3, 2026**, (Inside AI) — SpaceX is set to report its first quarterly earnings since its record-breaking $86 billion IPO, offering a critical early test of whether Starlink’s profits can sustain the company’s soaring spending on artificial intelligence and space ventures. The results, due after market close on Tuesday, will give public investors their first hard look at the financial logic behind a valuation that has already drawn skepticism.\n\nCEO Elon Musk has positioned AI as SpaceX’s future engine, with plans stretching from renting compute to developing frontier models and eventually building orbital data centers. But with the AI unit and Starship still burning cash, Musk intends to use Starlink’s earnings to fund both, a strategy critics call a high-wire act.\n\n**Will Rhind**, founder and CEO of **GraniteShares**, put the tension bluntly:\n\n**\"Starlink is executing beautifully, but it cannot single-handedly fund a $30 billion annualized AI capex program.\"**\n\nAnalysts expect the AI business to nearly triple revenue to **$2.33 billion** in the April–June quarter, a sharp jump from 12.5% growth in the prior period, per LSEG-compiled data. Starlink growth is also projected to accelerate to 52.6% from 31.6%, driven by expansion into new countries. Yet the AI unit’s capital spending is forecast to surge more than sixfold year-over-year to **$10.2 billion**, according to **Visible Alpha**, consuming the bulk of SpaceX’s total capex, which analysts peg at nearly **$14.05 billion** for the quarter.\n\nSpaceX shares have fallen sharply since the June IPO, as investors question whether a multiple of 77 times expected revenue can be justified. Pressure could intensify when the post-IPO lock-up period expires on **August 6**, potentially flooding the market with insider shares.\n\nInvestors are also watching for any comment from Musk on a potential merger with **Tesla**, after a media report last week said executives at the EV maker were told to prepare for a separation of its China business ahead of a deal. Musk dismissed the report as “fake news,” but he has previously declined to rule out a combination, citing growing overlap between the companies.\n\n## Can Compute Deals Offset AI’s Cash Burn?\n\nSpaceX has signed AI compute agreements with customers including **Anthropic**, **Alphabet’s Google**, and **Reflection AI**, but that may not be enough to quiet doubts. **Michael Monaghan**, portfolio manager of the **Founders 100 ETF**, which holds SpaceX shares, framed the central question:\n\n**\"The key question for investors is whether SpaceX can monetize its AI infrastructure through third-party compute fast enough to offset xAI's extraordinary capital intensity.\"**\n\n**MoffettNathanson** analyst **Julie Zhu** expects the AI business to generate positive core profit this year, aided by infrastructure deals, though she warned that the segment’s higher capex would temper the gains. **Bill Birmingham**, managing director at **REX Financial**, which offers ETFs tied to SpaceX stock, was more blunt:\n\n**\"This is not going to be a free cash flow story now, soon, or maybe even ever.\"**\n\nFor the whole company, analysts expect second-quarter revenue of about **$6.93 billion** and a loss before interest and taxes of **$1.55 billion**. Starlink, meanwhile, is forecast to post revenue of **$3.82 billion** and operating profit of **$1.42 billion**, up from **$1.19 billion** in the first quarter. At the end of March, Starlink had **10.3 million** subscribers, roughly double the year-earlier figure, though average revenue per user fell nearly 25%.\n\n## Starship’s Trajectory Holds the Long-Term Key\n\nMany investors still view **Starship** as SpaceX’s most critical asset, the linchpin for expanding Starlink, landing astronauts on the moon for **NASA** by 2028, and eventually deploying AI-processing satellites in orbit. Last month, Starship successfully deployed the first upgraded **Starlink V3** satellites on its 13th test flight, but the **Super Heavy** booster fell short of a controlled splashdown.\n\nAnalysts expect the launch business to generate **$871.4 million** in second-quarter revenue while posting an operating loss of **$773 million**. In the first quarter, the operating loss surged ninefold from a year earlier, and revenue fell 28.4% to **$619 million**. **Micah Walter-Range**, a space industry specialist who helped develop the index tracked by the **Procure Space ETF**, emphasized the stakes:\n\n**\"The progress on Starship is essential for demonstrating to investors that the company is on the desired trajectory.\"**\n\nThe earnings report will also be scrutinized for any updates on the [Starship program](https://www.spacex.com), given its role in Musk’s long-term vision. A 2024 study in the *Journal of Spacecraft and Rockets* highlighted the economic challenges of reusable heavy-lift vehicles, noting that high development costs and uncertain demand can strain even well-funded ventures ([source](https://arc.aiaa.org/doi/10.2514/1.A35456)).\n\nWith Starlink’s profits facing a squeeze from falling ARPU and AI’s capital demands showing no sign of easing, Tuesday’s report will test whether Musk can convince investors that his sprawling ambitions can coexist without burning through the company’s cash runway.", "url": "https://wpnews.pro/news/spacex-earnings-to-test-if-starlink-can-fund-musks-ai-spending", "canonical_source": "https://insideai.news/news/ai-in-business/spacex-earnings-to-test-if-starlink-can-fund-musks-ai-spending/6837/", "published_at": "2026-08-03 11:07:26+00:00", "updated_at": "2026-08-03 11:15:54.524463+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-infrastructure", "ai-products", "ai-policy"], "entities": ["SpaceX", "Elon Musk", "Starlink", "GraniteShares", "Will Rhind", "Anthropic", "Alphabet", "Google"], "alternates": {"html": "https://wpnews.pro/news/spacex-earnings-to-test-if-starlink-can-fund-musks-ai-spending", "markdown": "https://wpnews.pro/news/spacex-earnings-to-test-if-starlink-can-fund-musks-ai-spending.md", "text": "https://wpnews.pro/news/spacex-earnings-to-test-if-starlink-can-fund-musks-ai-spending.txt", "jsonld": "https://wpnews.pro/news/spacex-earnings-to-test-if-starlink-can-fund-musks-ai-spending.jsonld"}}