SpaceX shares slumped 9% in premarket trading on Wednesday as massive capital expenditures on artificial intelligence infrastructure overshadowed a jump in quarterly revenue. Chief Financial Officer Bret Johnsen reported capital spending reached $18.4 billion, with $15.8 billion directed toward AI compute, sparking investor debate over payback timeframes following the company’s June IPO.
Massive AI Capital Expenditures Overshadow SpaceX Revenue Growth
SpaceX reported strong top-line momentum, with revenue nearly doubling year-over-year and its AI business generating $2.6 billion—more than triple the amount recorded a year earlier. Yet, the sheer scale of the company’s spending dominated market reaction. Capital expenditures hit $18.4 billion during the quarter, roughly a fifth of the $85.7 billion the company raised in its June 12 initial public offering.
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Out of that total quarterly spend, $15.8 billion went directly toward artificial intelligence compute infrastructure, pole vaulting past analyst expectations and well above historical spending levels. The heavy investments left the company deeply free cash flow negative as executives continue funding ambitious expansions in Starship production and next-generation Starlink satellites.
Executives Defend Compute Economics While Wall Street Weighs the Timeline
During the post-earnings call, SpaceX executives pushed back against concerns that the spending is unsustainable, arguing that AI data centers generate revenue fast enough to bankroll their own expansion. Management revealed that the company has signed another $6.7 billion in cloud computing contracts since the end of the second quarter and is tracking toward a $100 billion annualized revenue run rate by year-end.
“The current economics have translated into a less than one-year payback on our new capital deployments for compute.”
Even so, market analysts remain divided over execution timing. David Wagner, portfolio manager at Aptus Capital Advisors, pointed to parallels with Musk’s historical trajectory at Tesla.
“Elon has continued to surprise investors on what innovation and technology can do, but there has always been a mismatch in terms of the time frame of when that execution is going to occur.”
David Wagner, portfolio manager at Aptus Capital Advisors
Broader Tech Market Divergence and Future Compute Targets
The market friction extended beyond SpaceX. Advanced Micro Devices also watched its stock slide 9% after hours despite posting a doubling of data center sales, as investors reacted cautiously to projections for its Helios platform and rising capital spending of $808 million. Across broader indices, the S&P 500 reached new records while tech stocks diverged sharply, with Nvidia adding more than 2% and SK Hynix climbing 6.4%.
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For SpaceX, the immediate test centers on whether surging demand can keep its planned infrastructure fully utilized. Executives told investors they expect to end the year with more than two gigawatts of compute capacity.
“The relationship between capex and revenue is unsustainable, so capex has to fall or revenue has to grow tremendously, and that is where faith in Musk’s vision, engineering leadership and execution track record separates the bulls from the bears.”
