Shares of Space Exploration Technologies Corp. declined Thursday, giving back some of the recent gains that had pushed the stock back above its initial public offering price, as investors continued to digest the company’s aggressive investments in artificial intelligence infrastructure and progress on its Starship program.
SpaceX stock fell $3.31, or 2.34%, to $137.98 in midday trading on the Nasdaq, according to market data as of 12:26 p.m. EDT on Aug. 14. The move followed a sharp rebound in recent sessions that lifted the shares above the $135 IPO price set in June, after an earlier post-earnings sell-off had driven them as low as about $105.
The company, which completed the largest IPO in history earlier this year, reported second-quarter results on Aug. 4 showing revenue of $7.8 billion, a 92% increase from $4.1 billion a year earlier. The figure exceeded analyst expectations. Net loss narrowed to $541 million from about $1 billion in the prior-year period, while adjusted EBITDA rose to $3.5 billion.
Connectivity, driven largely by the Starlink satellite internet service, generated $4.3 billion in revenue. The AI segment contributed $2.56 billion, reflecting rapid growth from cloud computing contracts. Space segment revenue stood lower as the company continued heavy development spending. SpaceX ended the quarter with roughly $100 billion in cash, cash equivalents and marketable securities, bolstered by IPO proceeds of about $85.7 billion and other financing, and carried a backlog of $47.5 billion.
Capital expenditures remained elevated, with a substantial portion directed at AI compute capacity. The company has signed major cloud services agreements and announced plans for Terafab, a joint semiconductor manufacturing initiative with Tesla valued at an initial $16.8 billion for its first phase in Texas, with potential for much larger expansion. An agreement to acquire Cursor for $60 billion was also disclosed, aimed at accelerating AI enterprise opportunities.
During an all-hands meeting with employees and on the earnings call, Chief Executive Elon Musk emphasized the growing role of artificial intelligence. He indicated that AI revenue was on track to surpass other SpaceX revenue streams as early as September and significantly exceed them in the fourth quarter. Musk has projected the company could reach a $100 billion annualized revenue run rate by the end of 2026 and $1 trillion in annual revenue by 2030.
On the Starship front, Musk said a key technical challenge had been addressed. “I don’t want to jinx it or anything, but I think I’d consider the heat shield problem solved at this point,” he stated on the earnings call. He expressed confidence in increasing flight cadence, saying, “We expect the cadence of flights to be increasing rapidly, and probably a year from now, we will be doing at least one flight a day, possibly more.” The company aims to attempt catching the Ship with the tower on an upcoming test flight and to deploy viable payloads.
Starlink remains a core revenue driver, with fixed wireless subscribers around 12 million at the end of the second quarter and additional mobile subscribers through partnerships. The service continues to expand geographically, including new markets. Launch operations maintained a high cadence, supporting both commercial and government contracts, including multi-year U.S. government awards.
Analysts remain largely constructive, with a majority rating the stock a buy and average price targets implying substantial upside from current levels. Some have highlighted the AI business as undervalued relative to its growth trajectory, while noting risks around capital intensity, execution on Starship reusability and competition in satellite connectivity and AI infrastructure.
The stock’s volatility since the June IPO has reflected investor focus on the balance between near-term spending and longer-term monetization of Starlink scale, reusable launch systems and AI compute. Lock-up expirations have added to supply concerns, though the first major release did not produce the heavy selling some had anticipated. A further unlock is scheduled later in August.
SpaceX continues to pursue vertical integration across rockets, satellites, connectivity and now semiconductor production and AI models, including releases of advanced Grok versions. Management has pointed to contracted cloud revenue providing visibility into returns on the compute investments.
Market participants will watch upcoming Starship flight tests, additional AI contract disclosures, Starlink subscriber trends and any updates on Terafab progress or the Cursor acquisition closing. The company’s ability to convert heavy capital outlays into sustained high-margin growth will likely remain a central theme for investors assessing the shares after their rapid recovery from recent lows.
While the Aug. 14 decline interrupted the short-term rebound, the broader narrative centers on SpaceX’s transition from a private launch and satellite company into a public entity with ambitions spanning multiplanetary transport, global connectivity and large-scale AI infrastructure. Execution across these fronts will determine whether the current valuation, still reflecting significant growth expectations, proves sustainable.
Discussion about this post