SpaceX heads into its first earnings report as a publicly traded company under mounting pressure after losing more than $500 billion in market value since its June 12 stock market debut, with investors increasingly questioning whether its ambitious artificial intelligence and space expansion plans can justify its lofty valuation.
The Elon Musk-led company has fallen more than 50% from its intraday high and is coming off its fourth consecutive weekly decline, making it one of the weakest-performing high-profile technology IPOs in recent years.
The decline comes as Wall Street’s attitude toward AI investments has shifted markedly. After months of rewarding companies for aggressive spending on artificial intelligence infrastructure, investors are now demanding evidence that massive capital expenditure is translating into sustainable revenue growth, profitability and free cash flow.
That changing sentiment has already weighed on several AI leaders this earnings season and now puts the spotlight squarely on SpaceX, whose valuation depends far more on future execution than current financial performance. Unlike established technology giants generating billions of dollars in recurring AI-related profits, SpaceX is still investing heavily across launch services, satellite broadband, orbital computing infrastructure and artificial intelligence.
According to its IPO filing, the company continues to burn billions of dollars each quarter while carrying nearly twice as much debt as cash. Even after the selloff, SpaceX trades at a price-to-sales multiple in the 70s, reflecting investors’ expectations for extraordinary future growth.
Guidance Expected To Outweigh Quarterly Results
Analysts quoted by CNBC broadly expect Tuesday’s earnings report to be judged less on quarterly financial performance than on management’s outlook for growth, AI monetization and capital spending.
The report also comes just ahead of the expiration of rolling IPO lock-up restrictions, allowing early investors to begin selling shares, a development that could add further pressure to the stock.
Short sellers have already benefited substantially from the decline. Matthew Unterman, head of research at S3 Partners, described the bearish positioning as unusually aggressive.
“It’s among the most aggressive and quickest bearish builds we have seen in a mega-cap name heading into its first earnings report post-IPO,” Unterman said.
For many analysts, the company’s valuation ultimately depends on Starship, the fully reusable launch vehicle expected to dramatically reduce launch costs while enabling SpaceX to rapidly expand its Starlink satellite network and future orbital AI infrastructure.
The company itself underscored Starship’s importance in its IPO prospectus.
“If Starship does not achieve full reusability or rapid turnaround, we may experience higher per-launch costs, slower deployment timelines for our large-scale constellations (including our orbital AI compute program), delayed revenue growth, and increased overall capital requirements, and our brand and reputation may suffer,” SpaceX said in the filing.
The company also stated that it expects Starship to “commence payload delivery to orbit” during the second half of the year.
While the latest Starship test flight in July achieved several milestones, the Super Heavy booster experienced a hard splashdown after only some of its engines reignited during landing, highlighting that technical challenges remain before full operational capability is achieved.
Bernstein analysts said Starship remains the single biggest issue for investors trying to justify the company’s valuation.
Investors are also expected to seek greater clarity on SpaceX’s rapidly expanding artificial intelligence business following its merger with xAI earlier this year.
The company is attempting to build a new revenue stream around AI infrastructure, including hosted computing capacity, orbital data centers and AI services, while also developing its Grok chatbot and integrating the planned acquisition of AI coding startup Cursor.
SpaceX has already secured several high-profile commercial agreements.
Days before its IPO, the company signed a deal with Google expected to generate about $920 million in monthly revenue by providing AI computing capacity. It has also reached agreements with Anthropic and Reflection AI to supply compute infrastructure.
Those partnerships are important because they allow SpaceX to generate recurring infrastructure revenue while continuing to invest heavily in AI development.
Analysts at Cantor believe those businesses could become an important catalyst.
“We think earnings can meaningfully alleviate some of those pressures as the company proves out hosted-compute profits, clarifies capital funding geographies, and clears its initial lockup headwinds,” the analysts wrote.
“We view SPCX as approaching a bottom into the print.”
Some Analysts See The Selloff As An Opportunity
Not everyone on Wall Street believes the recent decline reflects deteriorating fundamentals. Ben Harwood, an analyst at New Street Research, noted that the selloff has created an attractive long-term entry point.
“For a long-term investor we think this is an attractive entry point,” Harwood wrote.
“The growth runway is enormous, and SpaceX has one of the widest moats in the market today.”
Bernstein analysts were similarly focused on management’s long-term execution rather than quarterly earnings.
“We believe the quarterly results should not matter,” the analysts said.
“What will be important is the level of confidence projected by management regarding the company’s growth path.”
SpaceX’s earnings arrive as investors become increasingly selective across the AI sector. Recent earnings from Alphabet, Meta, Microsoft and Amazon demonstrated that companies are continuing to spend aggressively on AI infrastructure, but investors have become far less willing to reward spending without evidence of improving returns.
That development raises the stakes considerably for SpaceX. Beyond financial performance, investors will likely focus on updates regarding semiconductor availability, AI compute capacity, regulatory approvals for Starship launches and the pace of commercial adoption across its AI businesses.
The company must also navigate growing regulatory scrutiny surrounding Grok after its image-editing capabilities generated controversy and prompted investigations and lawsuits in both the United States and Europe.
With its shares still trading at a premium valuation even after a steep correction, Tuesday’s earnings call is widely expected to serve as a referendum on whether management can convince investors that SpaceX’s massive investments in reusable rockets, AI infrastructure and satellite computing can ultimately generate the scale of earnings needed to support the world’s largest market capitalization.
