SpaceX (NASDAQ: SPCX) stock plummeted 9.92% in overnight trading from its latest closing price of $125.33 to $112.90 following what, on the surface level, appears to be a triumphant first-ever quarterly earnings report.
Indeed, Elon Musk’s newer public company succeeded in beating expectations in essentially every category.
SpaceX’s revenue came in at $7.81 billion – $6.93 billion was expected – with the ‘Space’ segment reaching $962 million – analysts forecasted $835 million – connectivity hitting $4.29 billion – against $3.83 billion – and artificial intelligence (AI) bringing in $2.56 billion – versus a $2.18 billion estimate.
Additionally, though Elon Musk’s space, AI, internet, and social media firm recorded a loss per share during the second quarter (Q2), it came well below the expected $0.26 and at $0.09.
Why SpaceX stock is crashing despite earnings beat
Meanwhile, SpaceX overshooting Wall Street forecasts in one particular category is, arguably, one of the key reasons for the extended-session plunge.
Specifically, while analysts were expecting the company to burn $13.22 billion in capital expenditures (CapEx), the firm spent more than $18 billion in CapEx, with the primary beneficiary being AI infrastructure.
Under the circumstances, SPCX stock tanking following the earnings is consistent with the wider recent trend. Shareholders have grown increasingly anxious about AI-related expenditures as big tech has yet to transparently report any meaningful profits from the technology.
Even SpaceX’s impressive $2.56 billion in sales was substantially boosted by agreements to rent out compute to Anthropic and Google (NASDAQ: GOOGL) in agreements that can be expected to, once fully ramped up, bring in approximately $6.5 billion in quarterly revenue.
Still, even these deals represent a pain point since, on the one hand, their existence signals that SpaceX’s limited capacity is more than the firm needs for xAI and, on the other hand, reinforces that there are precious few sources of demand.
More critical analysts and observers have estimated that OpenAI and Anthropic represent the only meaningful AI compute users, with the presence of either one in data center lease agreements only reinforcing the notion.
Is SpaceX stock a good buy after earnings beat
Meanwhile, SPCX stock appears more likely to extend the downtrend it entered after the earnings than to enjoy a bullish reversal as in the August 4 regular session.
Since the initial public offering (IPO), SpaceX shares have been suffering from several powerful headwinds that were successfully held at bay by hype only briefly.
Though Wall Street analysts and Elon Musk repeatedly voiced their belief that the company’s sales can explode by 2030 and 2040 and maintained that SPCX will plausibly be the world’s first $10 trillion company, in 2026 the mismatch between revenue and valuation remains vast.
Additionally, SpaceX has been drawing criticism for its odd IPO design featuring uncommonly low float and unorthodoxly early insider unlocks, with both arguably skewing share prices and both due to play a larger role already in August.
Under the circumstances and with the imminent insider unlocks, SPCX stock appears more likely to fall to new lows in the short and mid-term than to reach again toward its all-time high (ATH).
Featured image via Shutterstock
