First quarterly earnings as a listed company from Elon Musk’s SpaceX (NASDAQ:SPCX) were impressive on the surface. But they arguably reinforce that SpaceX remains an outstanding company but not necessarily an outstanding investment at today’s valuation. Revenue comfortably beat Wall Street forecasts, Starlink continued to grow rapidly, launch activity remained robust and losses narrowed sharply.
Yet investors had been expecting more.
SpaceX investor relationsStarL
| SpaceX (NASDAQ:SPCX) | Price: $117.41 (-6.3% after-hours) | Market cap: $1.54tn |
After initially rising following the release, the shares reversed course to fall around 6-7% in after-hours trading, reflecting concerns that the valuation already discounts years of exceptional growth while management failed to provide enough fresh catalysts to justify another leg higher.
The truth is, one quarter of operational and financial performance was never going to justify the enormous expectations placed on the company following its world record IPO. It is a point made by Sharesify as recently as Friday, 31 July, both online and in our regular end of week podcast.
Coming next week: SpaceX, HSBC and Diageo
Sharesify podcast 31 July 2026
At a glance
| Metric | Reported | Expected | Verdict |
| Revenue | $7.8bn | ~$6.8-6.9bn | ✅ Beat |
| Net income | -$541m | Loss expected | Better than feared |
| Total capex | $18.3bn | ~$13.1bn AI capex expected | ❌ Higher than expected |
| Starlink revenue | $4.3bn | Slightly ahead | Positive |
| Starlink subscribers | 12m | In line | Positive |
| AI revenue | $2.6bn | Strong beat | Positive |
| After-hours share move | Around -7% | — | Negative |
Source: Company results, Reuters, Wall Street consensus.
What impressed investors
The underlying business remains exceptionally strong.
Starlink remains the profit engine
- Revenue rose roughly 66% year-on-year.
- Subscribers doubled to approximately 12 million.
- Operating profit increased sharply.
- Enterprise and government contracts continued expanding.
Meanwhile the launch business continued benefiting from growing commercial demand and US government contracts.
Important operational highlights included:
- continued Falcon launch cadence
- expanding national security launches
- further Starship development
- growing AI cloud infrastructure following the xAI acquisition
Revenue almost doubled versus last year, demonstrating that demand remains exceptionally robust.
The problem: expectations had become almost impossible to beat
The market wasn’t looking for ‘excellent.’
It was looking for extraordinary.
Following the record IPO, investors had already priced SpaceX as perhaps the world’s next trillion-dollar earnings machine.
That left little room for disappointment.
Instead of providing major upside surprises, investors received:
- another large quarterly loss
- much higher-than-expected capital expenditure
- no formal financial guidance
- few new commercial announcements
- no significant update that materially accelerated the long-term growth story
Wall Street largely concluded the long-term thesis remains intact—but little had changed over the last six weeks since listing… bar the share price. Having IPO’d at $135 per share, the stock went on an extraordinary post-float surge, hitting $200+. But the stock has since felt the gravitational pull of an unerring reality check. The stock is set to open on Wednesday ~13% below the IPO price.
Capex dominates the discussion
The biggest talking point became spending, as it has become for many AI companies.
Total capital expenditure reached around $18.3bn, with roughly $15.8bn directed towards AI infrastructure.
The spending supports:
- Starlink expansion
- AI compute
- Starship
- satellite manufacturing
- next-generation infrastructure
However, investors increasingly want evidence that enormous investment will eventually translate into sustainable earnings rather than simply ever-larger revenue.
That question remains unanswered.
Launch business
| Operational metric | Q2 2026 |
| Revenue | ~$962m |
| Major government contracts | $6.5bn secured |
| Space Force launch order | $1.6bn |
| Starship progress | Continued development |
The launch division remains strategically important, although Starlink continues generating most of the profits.
What Elon Musk said
Characteristically, management (Musk, in other words) remained highly optimistic.
Among Musk’s biggest messages:
‘We expect to reach a $100 billion annual revenue run rate by year end.’
He also reiterated ambitions to bring forward SpaceX’s long-term $1 trillion revenue objective to 2030 while continuing aggressive investment in AI infrastructure, Starship and future lunar manufacturing.
Notably absent, however, was:
- formal earnings guidance
- profit outlook
- cash flow targets
- discussion of a possible Tesla merger
That lack of additional detail disappointed investors hoping for a stronger roadmap.
What analysts said
Evercore ISI’s Kutgun Maral highlighted one of the biggest frustrations:
‘No guidance.’
Analysts also noted the absence of any discussion around a potential Tesla (NASDAQ:TSLA) combination despite speculation ahead of results.
Several analysts broadly viewed the results as:
- operationally excellent
- financially encouraging
- strategically ambitious
…but also acknowledged that valuation now requires consistently exceptional execution over many years.
Reuters noted investors are increasingly scrutinising whether the enormous AI spending can eventually produce returns that justify today’s valuation.
Why the shares fell
The post-results reaction reflects several factors.
- Expectations were already extremely high after the IPO.
- Capex exceeded forecasts.
- No formal guidance was issued.
- Profitability remains some distance away.
- Investors are increasingly focused on valuation rather than growth alone.
- A major post-IPO lock-up expiry is approaching, potentially increasing share supply.
Bull vs bear case
| 🐂 Bull Case | 🐻 Bear Case |
| Starlink continues to dominate with subscriber growth and expanding enterprise, government and direct-to-device services. | Valuation leaves little margin for error, with investors already pricing in years of exceptional execution. |
| Launch business remains unrivalled, supported by commercial demand, NASA and US Department of Defence contracts. | Capex remains exceptionally high, raising concerns over when heavy investment will translate into meaningful free cash flow. |
| Starship represents a transformational opportunity, potentially opening entirely new commercial markets including lunar logistics and deep-space missions. | Profitability remains elusive, with management prioritising investment over near-term earnings growth. |
| AI infrastructure and xAI integration could become a significant long-term growth driver alongside Starlink. | No formal financial guidance disappointed investors hoping for a clearer roadmap following the IPO. |
| Powerful competitive moat built through launch capabilities, satellite manufacturing and reusable rockets that rivals struggle to replicate. | Expectations were already extremely elevated, meaning even strong results struggled to justify further multiple expansion. |
| Long runway for revenue growth, with Musk targeting a $100bn annual revenue run rate and ambitious longer-term expansion. | Execution risks remain, including Starship development, regulatory approvals and continued AI monetisation. |
Investor verdict
For UK retail investors, these results arguably reinforce that SpaceX remains an outstanding company but not necessarily an outstanding investment at today’s valuation.
Operational performance continues to impress, with Starlink, launches and AI all growing rapidly. However, much of that optimism was already reflected in the share price before earnings.
Crucially, management did not provide the new catalyst investors were seeking. Without stronger guidance, faster profit progression or a major strategic announcement, it becomes harder to justify further near-term multiple expansion.
The long-term investment case remains compelling, but after one of the most anticipated IPOs in history, future share price gains are likely to depend less on rapid revenue growth and more on proving that massive investment can generate sustainable earnings and free cash flow.
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