Space Exploration Technologies Corp. (NASDAQ:SPCX) beat Wall Street’s revenue estimates in its first earnings report since its record June IPO. The stock still fell as much as 8% in extended trading anyway, as capital expenditures soared past what analysts expected.
Why a Real Beat Still Spooked Investors
Revenue came in at $7.81 billion, up 92% from a year earlier and well above the $6.93 billion analysts expected. SpaceX also lost less money than forecast, 9 cents a share versus an expected 26 cents. However, capital spending jumped more than sixfold to $18.4 billion, with $15.8 billion of that going to AI alone, more than double the prior quarter and above the $13.22 billion analysts expected.
Musk also pledged that SpaceX would build its AI data centers exclusively with Nvidia chips. NVIDIA Corporation (NASDAQ:NVDA) shares rose about 2% on the news even as SpaceX’s own stock fell.
This makes you wonder: does a genuine beat matter less than fears that SpaceX’s AI ambitions keep getting more expensive, even as the company insists the spending already pays for itself?
SpaceX’s Bull Case
Starlink revenue jumped to $4.29 billion, up 66% from a year earlier, with operating income of $1.66 billion. That proves the core connectivity business is genuinely profitable and still growing fast. AI revenue surged too, up roughly 250% to $2.56 billion, beating estimates.
CFO Bret Johnsen said AI capital deployment is already generating “less than a one-year payback.” Space Exploration Technologies Corp. (NASDAQ:SPCX) says it’s on pace for $100 billion in annualized recurring revenue by December.
Musk now projects $1 trillion in annual revenue by 2030, a year earlier than he’d previously forecast. Cash swelled to $93.5 billion after the IPO, giving SpaceX enormous room to keep funding its ambitions.
SpaceX’s Bear Case
The stock still fell. It rose 9.4% during the day Tuesday, then gave that back and more, closing down roughly 7.5% in after-hours trading once the numbers came out. Capital expenditures ballooned well past what analysts expected, and both the Space and AI segments still lose money, $542 million and $1.26 billion in operating losses. Starlink’s average revenue per subscriber fell 22% from a year earlier as Space Exploration Technologies Corp. (NASDAQ:SPCX) rolled out cheaper international plans. Short sellers have already made $8.3 billion in paper profits betting against the stock, and a lock-up expiration Thursday could bring a fresh wave of shares onto the market.
Nvidia’s Bull and Bear Case
Nvidia shares rose about 2% after Musk pledged SpaceX would build its AI data centers exclusively with Nvidia chips, calling the company’s Vera Rubin platform “the best AI computer.” The two companies also announced a partnership to design orbital “space compute” hardware for satellites. NVIDIA Corporation (NASDAQ:NVDA) CEO Jensen Huang has said each gigawatt of computing capacity SpaceX builds generates roughly $40 billion to $50 billion of revenue for Nvidia, a huge potential payoff given Musk’s plan to grow SpaceX’s compute from 2 gigawatts today to as much as 10 gigawatts by the end of 2027.
However, that dependence cuts both ways. Nvidia’s own fortunes are now more tied to whether SpaceX’s enormous, unproven AI buildout actually works. Nvidia also already holds an equity stake in the combined SpaceX-xAI entity from a January investment, meaning its exposure to SpaceX’s AI bet goes well beyond just selling it chips.
Insider Monkey’s Hedge Fund Data
SpaceX doesn’t appear in Insider Monkey’s hedge fund database, since it only went public in June 2026. NVIDIA Corporation (NASDAQ:NVDA) had 275 hedge fund holders as of Q1 2026, up from 264 the quarter before, though the dollar value hedge funds held slipped from $89.1 billion to $83.9 billion.
Among satellite-communications peers, AST SpaceMobile had roughly 39 holders, up from 33.
Conclusion
SpaceX just proved its revenue growth is real and accelerating. Wall Street cared more about how much more expensive that growth keeps getting. NVIDIA Corporation (NASDAQ:NVDA), cheering from the sidelines as the exclusive chip supplier, has now tied a real slice of its own future to SpaceX pulling this off.
While we acknowledge the risk and potential of SPCX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SPCX and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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