SpaceX AI spending unnerves Wall Street despite promising quick payoff

After SpaceX spent way more on its AI buildout than analysts expected, executives tried to convince investors on Tuesday that it’s all worthwhile, claiming that the company is making its money back within a year.

The message didn’t resonate, as SpaceX shares sank following the company’s first earnings report since its IPO in June. While revenue in the second quarter sailed past estimates, jumping 92% from a year prior, capital expenditures soared over sixfold to $18.4 billion, more than double total sales for the quarter.

Well over 80% of SpaceX’s capex went towards artificial intelligence, where the company is way behind OpenAI, Anthropic and Google when it comes to models and services, and where it’s now trying to compete against cloud giants Microsoft, Amazon and Google by selling compute capacity.

The capex figure exceeded the $13.22 billion average analyst analyst estimate, according to FactSet. The stock’s 7.5% after-hours dropped mostly wiped out its gains from earlier in the day and left the shares more than 20% below the first trade on June 12.

Bret Johnsen, SpaceX’s CFO, suggested on the earnings call that investors should start thinking differently about capex because of how quickly it’s converting into revenue.

“We have been very efficient, to date and I think we’ll continue to be,” Johnsen said. “On the AI compute side, we’re able to deploy capital in such a way that we’re getting less than a one-year payback.”

Days before its record IPO, SpaceX inked a deal with Google that will bring in up to $920 million a month by providing AI compute capacity to the search giant. Prior to that, Anthropic announced a deal that would involve paying up to $1.25 billion a month for three years for compute capacity at SpaceX’s Colossus data center in Memphis, Tennessee. And SpaceX has a separate agreement to provide computing power to Reflection AI for up to $150 million a month.

Johnsen said that in the first few weeks of the current quarter, SpaceX contracted $6.7 billion of cloud services revenue “over a six-month period that begins ramping starting in October.” Add it up, and the company is on pace to reach $100 billion in annualized recurring revenue by the end of the year, Johnsen said, noting that his numbers assume closure of the $60 billion Cursor acquisition.

In 2025, SpaceX’s total revenue came in at below $19 billion.

SpaceX CEO Elon Musk said investors can take the 2026 target to the bank.

“To be clear, the $100 billion ARR in December is not a question mark,” Musk said. “That’s what we would achieve if we basically did nothing.”

SpaceX addressed Wall Street for the first time during a period of heightened scrutiny surrounding AI spending as tech outlays reach into the stratosphere. Alphabet and Amazon could each spend over $200 billion this…