SpaceX shares swung from a strong regular-session gain to a sharp after-hours drop following the company’s latest earnings release. The stock rose 9.43% in normal trading to close at $125.33, then fell more than 8% after the report, touching about $114.6 at its lowest point in after-hours trading.
The company reported quarterly AI revenue of $2.561 billion, more than 2.6 times its space business revenue of $962 million. Revenue was stronger than expected, but spending rose even faster, leaving the company still in the red.
AI revenue moved ahead of the core space business
According to the report, SpaceX’s AI unit posted revenue growth of more than threefold from a year earlier, reaching $2.561 billion for the quarter. The main driver was leasing computing power to other AI companies.
SpaceX completed what the report described as the largest IPO in history in June this year, listing under the ticker SPCX. In documents filed for investors, the company said most of its future value would come from AI rather than rockets or satellite internet, and it even pointed to the idea of building data centers in space as something competitors could not match.
The latest quarter offered numerical backing for that pitch. The report said SpaceX signed a compute supply agreement with Anthropic in May and reached a similar deal with Google in June, putting it in more direct competition with newer cloud providers such as CoreWeave.
Compute leasing became a major source of growth
The report said SpaceX moved into the compute rental business after its in-house AI model Grok fell behind. It also said Grok became entangled in controversy over the generation of explicit images without consent, including cases involving minors.
Before the IPO, SpaceX redirected data center capacity that had originally been set aside for Grok and leased it out instead. The company has also agreed to acquire coding editor tool Cursor to fill out its enterprise AI product lineup.
SpaceX now splits its operations into three businesses: space, AI and connectivity, the latter referring to the Starlink satellite network.
- The space business generated $962 million in revenue this quarter, with launch services still doing most of the work.
- The AI business generated $2.561 billion.
- Starlink brought in $4.2 billion and remains the only consistently profitable segment among the three, serving as the company’s main cash flow anchor.
Revenue beat forecasts, but capex rose much faster
SpaceX reported total quarterly revenue of $7.814 billion, ahead of the market expectation of $6.93 billion. AI revenue of $2.561 billion also beat analysts’ estimate of $2.18 billion.
The bigger issue was capital expenditure. Analysts had expected about $13.22 billion, but actual spending reached $18.37 billion. Of that total, $15.83 billion was tied to AI investment alone.
In other words, SpaceX brought in more revenue than expected, but it also burned through cash at a much faster pace. The report identified that gap as the main reason the stock failed to hold its gains after earnings.
Musk pointed to a faster AI buildout
On the earnings call, Elon Musk said SpaceX was building AI compute capacity at massive scale faster than anyone else, while also making major improvements to its AI models.
The market reaction, though, showed that investors were focused more on the cost of that expansion. AI revenue has already overtaken the space business, but the rapid rise in capital expenditure became the dominant point after the results were released.