Elon Musk is trying to talk SpaceX out of a share-price crater with trillion-dollar dreams and orbital data-centre guff.
According to the Wall Street Journal Musk sketched out a set of targets so ambitious they need their own oxygen supply. The pitch included launching data centres in space in 2027 and reaching $1 trillion in revenue.
It was Musk’s first address to investors since SpaceX’s initial public offering, which means some early buyers got to hear why losing nearly half their money is apparently part of the adventure.
The billionaire’s patter followed an earnings report showing sharp revenue growth across space, connectivity and artificial intelligence. Revenue for the world’s biggest rocket launcher and satellite-internet outfit hit $7.8 billion in the second quarter, up 92 per cent from the same period last year.
The company is still burning cash like a rocket stage with a marketing department. SpaceX posted narrower losses in the latest period, but capital spending stomped all over operations.
Capital expenditure hit $18.4 billion for the quarter, up from $2.8 billion a year earlier. SpaceX shares closed Tuesday up more than nine per cent, so investors still believed Musk. Then the earnings report and call landed, and the stock fell more than eight per cent in after-hours trading.
In a roughly hour-long call with analysts, Musk talked up SpaceX reaching $1 trillion in revenue by 2030. That moved forward an earlier projection of 2031.
The call borrowed from Tesla’s investor-theatre playbook, with Musk and other executives answering questions from individual investors.
Musk has a long history of throwing huge targets at the wall and watching the faithful applaud the splatter pattern. Some of those targets were never reached, although they have helped him whip staff towards particular goals and flatter investors who enjoy risk.
SpaceX executives tried to frame the spending binge as essential for building AI infrastructure.
SpaceX president Gwynne Shotwell said on the call: “Though I’ve been in this business for 24 years, I could not be more excited for the months ahead. It really feels like we’re just getting started all over again.”
That should be a comfort to investors who bought at the top and now get to experience being started all over again too.
SpaceX’s IPO was priced at $135 a share. The stock blasted above $225 in the days after its market debut, before falling below the IPO price in recent weeks.
The slide wiped more than $1 trillion from its peak value, which is a heroic amount of investor wealth to misplace.
Since Musk founded SpaceX in 2002, the company has come to dominate rocket launches and satellite internet. In pitches for its blockbuster IPO, SpaceX touted its transformation into a major AI player.
That was handy, since every company now seems to need AI sprinkled on top before investors will pretend the valuation makes sense. The business that includes Starlink remains SpaceX’s biggest.
Its thousands of low-Earth-orbit satellites already provide internet service in about 170 markets. SpaceX sees room to expand availability in existing markets and increase its number of corporate and government customers.
Starlink subscribers doubled to 12 million in the second quarter. SpaceX reported $4.3 billion in revenue for the segment, up 66 per cent from the same period last year.
It was the only segment to post an operating profit in the latest quarter, which makes it the adult in the room.
Musk told investors on the call: “It’s not out of the question that at some point Starlink will deliver the majority of the world’s internet. It’s not like in the infinity future. It’s less than 10 years.”
SpaceX’s AI segment is still being bolted together after the company’s February acquisition of xAI, Musk’s artificial-intelligence startup. Revenue more than tripled from the prior year to $2.6 billion. SpaceX said new cloud service agreements helped drive that growth.
In securities filings, SpaceX estimated the total addressable market for the business at $28.5 trillion. It claimed the market opportunity for AI was about $26.5 trillion.
For context, the entire US economy has been estimated at more than $30 trillion, so the pitch appears to be “nearly everything, please.”
While SpaceX pours money into its cash-burning AI adventure, its mature space operations have been landing useful wins. The company hauled in a $1.6 billion launch order from the Space Force in late July.
Earlier this year, it won national-security satellite deals from the military branch worth roughly $6.5 billion. Late last month, SpaceX launched its huge Starship rocket in another test flight.
The launch demonstrated its ability to deploy a larger version of its Starlink satellites, with the unfortunate title “V3.”
Standing roughly 400 feet tall on the launchpad, Starship is the throughline for many of SpaceX’s grand claims. It is central to lunar missions for Nasa, beefing up Starlink and, in Musk’s preferred fever dream, deploying AI data centres in space.
SpaceX needs to get Starship flying regularly. For now, Musk is selling the idea that more spending, more rockets and more orbital AI will rescue investors from the gravity well.
