SpaceX’s stock plummeted following the release of its inaugural quarterly financial report as a publicly traded company. Shares dropped more than 13 percent, closing at $108.10 on Wednesday compared to the previous day’s $125.33, signaling investor concern over the company’s financial strategy.
Market participants expressed alarm at SpaceX’s substantial capital expenditure announcement. The company disclosed spending of $18.37 billion, representing a six-fold increase from the previous year and significantly exceeding the $13.2 billion analysts had anticipated. The bulk of these funds, approximately $15.8 billion, will support artificial intelligence infrastructure development, including data center expansion from its current 1.4GW capacity to 2GW by year-end.
Broader technology sector concerns about artificial intelligence investment returns have now extended to SpaceX. Industry observers note the company faces particular challenges in justifying its substantial data center expenditures to shareholders. However, SpaceX has indicated these facilities generate revenue through cloud services agreements totaling $14.1 billion and support its Grok models.
A bright spot emerged from SpaceX’s connectivity division, where Starlink satellite communications revenue surged 66 percent annually. The service’s subscriber base doubled to 12 million users, generating $1.66 billion in operating income. Volatility may persist as post-IPO share restrictions expire Thursday, potentially releasing roughly 911.5 million shares to the market.
Originally reported by Aljazeera →
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