SpaceX executives presented an aggressive defense of the company’s substantial artificial intelligence investments during its first earnings call since going public in June, arguing that the spending will generate returns in less than a year. Chief Financial Officer Bret Johnsen highlighted recent cloud services contracts worth $6.7 billion that are expected to begin generating revenue in October, suggesting the company’s capital allocation strategy is sound and efficient.
However, Wall Street remained unconvinced. The aerospace company’s stock dropped 7.5% following the earnings announcement, despite quarterly revenue jumping 92% year-over-year. Capital expenditures reached $18.4 billion, more than six times the prior year level and well above analyst expectations. Over 80% of this spending targeted artificial intelligence infrastructure, positioning SpaceX to compete with major cloud providers including Microsoft, Amazon, and Google in the competitive AI compute market.
SpaceX is projecting annualized recurring revenue of $100 billion by year-end, driven by major deals with clients such as Anthropic and Google. CEO Elon Musk stated investors should view this target as certain to achieve. The company entered the AI sector in February through its acquisition of xAI and now operates data centers designed to generate revenue by leasing compute capacity alongside its original space operations business.
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