SpaceX's first earnings report since its record-breaking IPO will provide an early gauge of whether Starlink's profits can sustain the company's rapidly growing spending on AI and space ventures.
Due after the market closes on Tuesday, the results will give SpaceX's limited pool of public investors their first chance to judge whether the financial case behind the company's lofty valuation supports CEO Elon Musk's vision of a powerhouse spanning AI, space and telecommunications.
Musk has pitched AI as SpaceX's future growth engine, with ambitions extending beyond renting compute capacity to other companies to developing frontier models, consumer and enterprise software, and, eventually, data centers in space. But until its AI business and Starship launch operations can stand on their own, Musk plans to use Starlink's profits to bankroll both ventures, a strategy critics argue is unsustainable.
Analysts expect the AI business to nearly triple to $2.33 billion in the April-June quarter, up sharply from 12.5% growth in the prior quarter, according to LSEG-compiled data. Starlink growth is also expected to accelerate to 52.6% from 31.6%, driven mainly by expansion into more countries.
SpaceX's AI expansion consumed $7.72 billion in the January-March quarter, accounting for about three-quarters of the company's total capital spending. Analysts expect SpaceX to report capital expenses of nearly $14.05 billion in the April-June quarter. Capital spending in the AI segment is expected to surge more than six times to $10.2 billion from the same period last year, according to Visible Alpha data.
SpaceX shares have pulled back sharply since the company's $86 billion IPO in June, as investors questioned whether its lofty valuation of 77 times expected revenue can be justified.
The stock could face additional pressure from the expiry of SpaceX's post-IPO lock-up period starting August 6, which may unleash a wave of insider and early-investor shares on the market.