SpaceX Beats Expectations in First Public Earnings Report

SpaceX delivered its first quarterly earnings report as a public company on Tuesday, posting a loss of $541 million (9 cents per share) for the second quarter of 2026 — less than half what Wall Street analysts had forecast — while revenue surged 92% year-over-year to $7.8 billion, according to AP News. The results offered the first detailed public look at the financial health of Elon Musk’s rocket, satellite, and artificial intelligence conglomerate since its record-setting June IPO.

Despite beating expectations on both revenue and losses, SpaceX shares fell sharply in after-hours trading and continued to slide on Wednesday, closing at $108.27 — a new all-time low, down 13.6% — as investors focused on the company’s massive capital expenditures and an impending lockup expiration.

Starlink Anchors Growth

The standout performer in the quarter was SpaceX’s connectivity business, which includes the Starlink satellite internet service. Revenue from the segment jumped 66% year-over-year to $4.29 billion, with operating income of $1.66 billion and an operating margin of 38.6%. Starlink’s subscriber base doubled over the past year to 12 million, with a net gain of 1.7 million subscribers in the quarter alone, as reported by IBTimes Australia.

“It’s not out of the question that at some point, Starlink will deliver a majority of the world’s internet,” Musk said during the earnings call.

AI Business Accelerates

SpaceX’s artificial intelligence division posted revenue of $2.56 billion, up roughly 250% year-over-year, driven largely by cloud-computing contracts with Anthropic and Google. The segment’s operating loss of $1.26 billion was significantly better than the $2.39 billion analysts had estimated, according to TechCrunch.

Chief Financial Officer Bret Johnsen said the company has an additional $6.7 billion in cloud services revenue under contract, set to begin ramping in October. He also expressed confidence that SpaceX will reach a $100 billion annualized revenue run-rate by the end of the year, a target Musk reinforced during the call.

“The $100 billion ARR in December is not a question mark,” Musk said. “That’s what we would achieve if we basically did nothing.”

Massive AI Spending Spooks Investors

The central concern weighing on the stock is the scale of SpaceX’s capital expenditures. The company spent $18.37 billion in Q2 — a sixfold increase from a year earlier — with $15.8 billion, or roughly 86%, directed toward AI infrastructure. JPMorgan analyst Doug Anmuth noted the company now projects nearly $200 billion in capex for both 2027 and 2028, which further pressures free cash flow, as reported by Yahoo Finance.

Musk defended the spending, arguing that the resulting growth would allow the company to reach $1 trillion in annual revenue by 2030 rather than 2031. He also announced that Nvidia would serve as SpaceX’s exclusive AI hardware provider, a partnership that sent Nvidia shares up nearly 4% and extends the chipmaker’s reach into space-based computing infrastructure, according to IBTimes Australia.

Lockup Expiration Looms

Adding to the market’s nervousness is the expiration of the first lockup provision on Thursday, August 6, which will release more than 900 million shares for trading — more than doubling the current available float. A second tranche of roughly 911.5 million shares becomes eligible after Q3 results, according to Deutsche Bank estimates cited by IBTimes Australia.

Will Rhind, CEO of investment firm GraniteShares, suggested the stock’s recent decline may have less to do with Tuesday’s results and more with the upcoming share unlock, as noted in IBTimes Australia.

A Volatile Debut

SpaceX went public in June at $135 per share, raising $85.7 billion in the largest IPO in history. Shares surged 19% on their first day of trading, briefly making Musk the world’s first trillionaire, and peaked at $225.64 intraday on June 16. Since then, the stock has fallen roughly 50%, erasing hundreds of billions in market value and knocking Musk’s net worth down to $783 billion, according to Forbes figures cited by AP News.

“This report comes at an important time, the share price crashed and burned in recent weeks, it is down 50% from its peak and is trading below its IPO price,” said Kathleen Brooks, research director at XTB, in comments reported by The Guardian.

What Analysts Are Saying

Wall Street remains broadly bullish on SpaceX’s long-term prospects despite the recent stock slide. J.P. Morgan analysts described the company’s ambitions as “bigger than any company’s we’ve ever seen,” projecting the stock could reach $225 by the end of 2027, while Raymond James is the most optimistic with an $800 target, according to AP News.

“Just as railroads, electric grids, and the Internet reshaped prior economic eras, we believe SpaceX is building the foundational platform for the next generation of industrial capacity,” Raymond James analysts wrote.

More cautious voices, including MoffettNathanson, have assigned a “neutral” rating with a $131 target, citing regulatory and technology unknowns. Thomas Monteiro, senior analyst at Investing.com, noted that while the earnings call delivered positives, “in a market already wary of heavy capex and negative free cash flow amid a shifting rates cycle, that profile may not sit well for the longer term,” as reported by The Guardian.

What to Watch Next

The coming days will test whether SpaceX can stabilize investor sentiment. The lockup expiration on Thursday could trigger further volatility as insiders gain the ability to sell shares for the first time. Meanwhile, the company’s ambitious targets — including $100 billion in annualized revenue by year-end, a lunar landing attempt in 2028, and plans to build data centers in orbit — will face continued scrutiny from investors weighing the sustainability of its massive AI infrastructure investments.

SpaceX President Gwynne Shotwell struck an optimistic tone on the call: “We had an exceptional second quarter. It really feels like we’re just getting started all over again,” as quoted by LA Times via Yahoo Finance.

With the first public look at SpaceX’s financials now in hand, the central question for investors is whether the company’s explosive growth can eventually justify its enormous spending — and whether the market’s patience will hold through the coming wave of share supply.