On Wednesday, SpaceX's stock dropped more than 10% in premarket trading after the company reported a sixfold increase in capital expenditures to $18.4 billion in the second quarter, largely driven by investments in artificial intelligence. This spending exceeded analyst expectations but raised alarms among investors about the company's financial management and growth trajectory.
The stock closed at just over $125, below its IPO price of $135 and significantly off its peak of over $200. Despite narrowing losses and projecting $1 trillion in annual revenue by 2030, concerns linger about the pace of growth and the costs associated with achieving profitability.
CFO Bret Johnsen attempted to reassure investors by stating that the company is efficiently deploying capital with a payback period of less than a year for AI compute investments. Additionally, the upcoming expiration of insider lock-ups may further impact the stock as insiders could sell their shares.
Investors are increasingly wary this earnings season, questioning whether major tech firms can deliver returns on their substantial investments