SpaceX delivered its first earnings report as a public company on Tuesday, and the numbers beat Wall Street's expectations even as investors grapple with the cost of Elon Musk's AI ambitions. Second-quarter revenue jumped 92% year over year to $7.8 billion — nearly $1 billion above the consensus estimate of about $6.9 billion.

The headline was the AI segment, created by the February merger with Musk's xAI. AI revenue reached $2.6 billion, up 213% sequentially and 247% year over year, driven by new cloud-service agreements, including a deal with Google worth up to $920 million a month and an agreement for Anthropic to use all capacity at the Colossus 1 data center in Memphis. The connectivity business anchored by Starlink remains the only profitable segment, with adjusted EBITDA up 64% to $2.6 billion.

But the buildout comes at a heavy price. The company reported a net loss of roughly $4.3 billion for the quarter, and its AI expansion consumed $7.72 billion of capital expenditure in the first three months of the year alone — about three-quarters of total capex. Analysts expect full-year capex of almost $46 billion for 2026.

The stock, which closed Friday at $108.37, has shed more than half its value from its post-IPO intraday high, erasing over $500 billion in market cap since its first trade on June 12. With rolling lock-up restrictions expiring in the coming days, early investors get their first chance to sell. Analysts remain split: New Street Research calls the slide a buying opportunity, while short sellers have booked roughly $8.3 billion in paper profits since the IPO.

Beyond AI, the report highlighted Starship, which SpaceX says must achieve full reusability for its orbital data-center ambitions to pay off. The company expects Starship to begin delivering payloads to orbit in the second half of this year, and its $60 billion acquisition of AI-coding startup Cursor is expected to close in the third quarter, pending regulatory approval.

Sources