SpaceX spooks investors with debut earnings report

SpaceX’s AI revenue more than trebled from the previous quarter to $2.56 billion, with the majority of that coming from deals to lease data center capacity to rival AI groups including Anthropic and Google.

That approach has boosted SpaceX’s short-term revenues while limiting its capacity to train and run its own competitive AI models.

Dec Mullarkey, managing director of SLC Management, said SpaceX’s data center leasing could hamper it. “Their margins are going to be capped if they are primarily a cloud company,” he said.

SpaceX’s $1.65 trillion market capitalization also hinges on Musk achieving ambitious goals such as reaching Mars with reusable rockets, putting data centers into orbit, and playing a critical role in developing AI.

Goldman Sachs, a bookrunner on SpaceX’s offering, expects the company’s AI revenue to increase 100-fold by 2030. Musk said on Tuesday that SpaceX could hit $1 trillion in revenue by the end of the decade.

On the earnings call, Musk said SpaceX had made progress on its first generation of orbital data centers, dubbed Starmind AI-1. “This is not some sort of far-future, distant thing. We expect to start launching these next year.”

The latest series of Grok AI models are being trained on SpaceX data, which Musk said would give his company’s tools an edge in engineering.

Musk also argued that the potential of the group’s Starlink unit—which provides satellite Internet—was “under-appreciated.”

Some traders have been putting on bets against SpaceX shares in recent weeks. Short interest in the company has risen to the equivalent of 220 million shares, or roughly 34 percent of the shares that are freely trading, according to data provider S3 Partners.

Analysts at Deutsche Bank said the end of the stock’s initial lock-up period for employees on Thursday was weighing on SpaceX’s equity price. The German bank also said “lower than expected” buying by passive funds that track indices was affecting SpaceX’s shares after it was added to the Nasdaq 100 index last month.

Investors are also weighing the probability of Musk merging SpaceX with Tesla after previously consolidating parts of his business empire.

Musk said the electric-car maker was increasingly collaborating with SpaceX, including through Terafab, a semiconductor manufacturing initiative, during Tesla’s earnings call last month.

He added that any merger would have to take place under the “appropriate process.”

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