The stock of SpaceX (SPCX) was down as much as 12% after the company delivered its first earnings report as a public company.
The commercial space company’s financial results proved better than Wall Street had expected, but the print was overshadowed by increased spending on artificial intelligence (A.I.).
SpaceX announced an earnings per share (EPS) loss of -$0.09 U.S., which was much better than a loss of -$0.26 U.S. expected among analysts.
Revenue came in at $7.81 billion U.S., which topped the $6.93 billion U.S. that had been forecast on Wall Street. Sales were up 92% from a year earlier.
Most of SpaceX’s revenue, and its only source of profit, continues to come from its connectivity segment, which consists of its Starlink satellite internet service.
The company’s other two operating units each posted quarterly losses, with the space segment losing $542 million U.S. and the A.I. unit losing $1.26 billion U.S.
Connectivity, which includes Starlink, remained profitable, with operating income in the quarter of $1.66 billion U.S.
Despite a better print than anticipated, the financial results took a backseat to SpaceX’s increased A.I. spending, which appears to have rattled investors.
The company led by Elon Musk said its capital expenditures jumped sixfold to $18.40 billion U.S. in the year’s second quarter, with the majority of that spending going towards A.I.
Investors are growing weary of multibillion-dollar A.I. investments that aren’t yielding returns for large technology companies.
SPCX stock has fallen 50% from a peak of $225.64 U.S. per share reached shortly after the company’s June initial public offering (IPO).
The first earnings report triggers the expiration of insider lockups, meaning that early investors such as employees and hedge funds can now sell a portion of their shares in SpaceX.
Analysts say the end of the lockup period is likely to cause a wave of selling in SPCX stock and lead to further declines in the share price.
