SpaceX has reported a strong second quarter, but investors were not fully convinced by the results. The company, formally known as Space Exploration Technologies, reported much stronger-than-expected revenue and earnings for the quarter ended June 30. SpaceX’s revenue jumped 92% year over year to $7.8 billion. This means the company generated almost twice as much revenue as it did during the same period last year.
The company’s loss per share also improved sharply. SpaceX’s loss per share fell from $0.26 last year to $0.09 this year, showing that the company moved closer to profitability on a per-share basis. Adjusted EBITDA rose 191% to $1.2 billion. EBITDA is a measure used to look at a company’s operating performance before certain costs are taken into account.
Despite the strong numbers, SpaceX stock fell after the earnings report on August 4. The stock later recovered some of those losses, showing how uncertain investors remain about the company’s future growth and valuation, according to The Motley Fool. SpaceX’s business is currently spread across three major areas: space operations, Starlink and artificial intelligence. Each division is growing at a different speed and has a different impact on the company’s finances.
Space business continues to grow
SpaceX’s space business generated $962 million in revenue during the quarter. That was a 29% increase from the same period last year. However, the space division remained loss-making. Its operating loss increased to $542 million from $369 million a year earlier.
SpaceX carried out 38 launches during the quarter. That was lower than the 44 launches recorded during the same period last year. The company delivered 485 tons of material into orbit during the quarter. SpaceX is continuing to improve its launch technology as it tries to make space missions cheaper.
SpaceX believes it can eventually bring the total cost of space operations down to just 1% of the historical average. In other words, the company believes its technology could reduce traditional costs by as much as 99%, according to The Motley Fool.
Starlink is becoming a major money-maker
Starlink is one of the strongest parts of SpaceX’s business right now. Revenue from Starlink increased 66% year over year to $4.3 billion. Starlink’s operating profit jumped 79% to $1.7 billion. This means the satellite internet business is already generating a large amount of operating profit for SpaceX.
Starlink’s subscriber growth doubled to 12 million. The increase shows that demand for its satellite internet service continues to grow. Business customers are becoming especially important for Starlink. Revenue from enterprise contracts increased 108% during the quarter, according to The Motley Fool.
Also read: Google stock falls 4% as Demis Hassabis steps down in DeepMind leadership shake-up
Even though Starlink added many new customers, it still earned an average of $66 from each customer. This means Starlink was able to grow its customer base without earning much less from each user.
AI is becoming a huge part of SpaceX
SpaceX’s AI business saw the fastest growth among its businesses. AI revenue rose 247% from last year to $2.6 billion. However, the AI business is still losing money. Its operating loss was $1.3 billion. This shows that SpaceX is spending a lot of money to grow its AI business.
SpaceX has already signed $14 billion worth of cloud computing agreements. These deals are expected to help bring more revenue into the AI business. The cloud agreements contributed $1.4 billion in revenue during the quarter. This shows why AI and cloud computing could become important sources of future growth for SpaceX. SpaceX could see another boost from Cursor. The company is in the process of acquiring coding company Cursor, and completing that deal could bring additional revenue, according to The Motley Fool.
The biggest concern is SpaceX’s huge spending
Investors are worried about how much SpaceX is spending to build its future businesses. The company reported $18.4 billion in capital expenditure. A huge $15.8 billion of that spending went toward AI. This shows how aggressively SpaceX is investing in artificial intelligence and related infrastructure.
SpaceX CFO Bret Johnsen said the company expects to recover that AI investment within one year. However, the market appears to be doubtful about whether the company can achieve that target so quickly, according to The Motley Fool. This spending is one reason investors may remain cautious about SpaceX over the next year. Even though revenue is growing quickly, the company is also making very large investments that could put pressure on its finances.
Where could SpaceX be by August 2027?
Wall Street expects SpaceX to generate about $39 billion in sales in 2026. That would represent a 108% increase, according to the figures cited by The Motley Fool. Analysts expect sales to rise even further to about $73 billion in 2027. That would be an 87% increase from the average 2026 estimate.
The current analyst price target is around $220 per share. That is almost twice the stock’s current price. If SpaceX continues to beat Wall Street’s expectations, its stock could be in a stronger position one year from now. Faster-than-expected growth could make investors more comfortable with the company’s high valuation.
However, SpaceX’s stock could remain volatile. Elon Musk’s leadership, the company’s aggressive investments and its plans for future space missions all create uncertainty around the stock. SpaceX is also looking beyond its current businesses as it works toward bigger space ambitions. Its plans to push further toward the Moon could create new opportunities, but they could also require more spending and increase investment risks.
Lockup periods could be important
Another major factor for SpaceX stock over the next year will be its lockup periods. These restrictions prevent certain shareholders from immediately selling their shares. By around one year from now, SpaceX is expected to be past its staggered lockup periods. This could give the market a clearer picture of how much stock is actually available for trading.
The end of the lockups could also reduce some of the uncertainty around the stock. Once more shares become available, investors may have a better idea of what SpaceX is really worth based on supply, demand and company performance. The Motley Fool’s assessment is that SpaceX stock may not make a major move until the lockup periods end. The report argues that August 2027 could provide a better picture of the company’s value because the price would be based more heavily on its business fundamentals at that point.
SpaceX is still valued very highly
SpaceX’s valuation remains a major issue for investors. After the latest revenue increase, the company is trading at a price-to-sales ratio of about 63, according to The Motley Fool. That ratio is lower than it was before the earnings report. The strong increase in sales has helped bring down the valuation when measured against revenue. But a price-to-sales ratio of 63 is still extremely high. This means investors are already expecting SpaceX to deliver very strong growth in the coming years.
SpaceX therefore needs to keep growing faster than its valuation rises. If revenue and profits grow quickly enough, the company’s high valuation could become easier to justify. If growth slows down, the stock could face more pressure. Investors may be less willing to pay a very high price for SpaceX if its future growth does not match current expectations.
