SpaceX Stock Drops 12% Despite Strong Q2: AI Spending Spooks Investors

SpaceX (SPCX) reported its first earnings as a public company for Q2 2026, and the numbers were a mixed bag. The company trounced expectations with a loss of $0.09 per share versus the expected $0.26 loss, and revenue surged 92% year-over-year to $7.8 billion, beating the $6.9 billion consensus. On the surface, that's a blowout quarter.

But the stock fell 12% after the report, and the culprit was a single number: $18.4 billion in capital expenditures (capex) for the quarter. That's a massive amount of spending, and investors are worried about the return on that investment.

Management was clear that the bulk of this spending—$15.8 billion—is going into AI compute capacity, not space. In fact, the company's prospectus highlighted a $28.5 trillion market opportunity, with $26.5 trillion of that in AI. Elon Musk boasted, "We're building AI compute capacity at scale faster than anyone else."

To put that in perspective, Amazon and Alphabet are each spending around $200 billion annually on AI, so SpaceX's quarterly spend is still lower on an annualized basis. But the market has become increasingly wary of high AI spending, especially when it's coming from a company that's also trying to fund ambitious space projects.

Despite the sell-off, management remains confident. President Gwynne Shotwell noted that SpaceX has already contracted $6.7 billion in revenue over the next six months, and she expects the company to hit a $100 billion annualized revenue run rate by the end of the year. CFO Bret Johnson also downplayed the capex risk, saying the investment will be recouped in less than a year.

For investors, the key takeaway is that SpaceX is now as much an AI company as it is a space company. The $15.8 billion AI capex in Q2 is double last year's total, and it's clear that management sees AI as the primary growth driver. This shift has significant implications for the stock's valuation and risk profile.

The market's reaction suggests that investors are skeptical about the pace of AI spending and whether it will pay off. SpaceX's stock had initially risen 15.83% on the earnings beat, but the subsequent 12% drop erased those gains and then some. This volatility highlights the uncertainty surrounding the company's dual focus on AI and space.

If SpaceX can deliver on its revenue targets and recoup its AI investment quickly, the stock could be a huge winner. The company's space business is also making progress, with Starship expected to be fully reusable and capable of sending a flight a day within a year. Musk's vision of delivering 1 million tons to orbit annually is ambitious, but if anyone can pull it off, it's him.

However, the market is clearly worried about execution risk. The company has repeatedly postponed Starship launches, and the AI capex is a massive bet that may not pay off as quickly as management expects. For investors, this is a high-risk, high-reward situation.

The comparison to Amazon and Alphabet is telling. Those tech giants can afford to spend billions on AI because they have massive cash flows from their core businesses. SpaceX, on the other hand, is still loss-making and has to fund both AI and space initiatives. That's a tall order, and it explains why the market is cautious.