SpaceX shares fell after the company’s first earnings report as a public company, as investors focused on soaring AI-related spending despite stronger-than-expected revenue growth and an optimistic long-term outlook.

Revenue increased 92% year over year during the second quarter, but capital expenditure climbed to $18.4 billion, significantly exceeding analysts’ expectations. Most of that investment was directed toward expanding the company’s artificial intelligence infrastructure.

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Betting Big On AI

SpaceX is rapidly building AI computing capacity as it seeks to compete in the fast-growing market for cloud-based AI services. The company says those investments are already generating demand through agreements with customers including Google, Anthropic and Reflection AI.

Chief Financial Officer Bret Johnsen told investors that AI infrastructure is expected to pay for itself in less than a year, arguing that the company’s capital spending should be viewed as a driver of future revenue rather than a short-term cost.

Investors Remain Cautious

Despite those assurances, investors reacted negatively to the scale of spending, sending the stock lower after the results were released.

The earnings report comes as technology companies continue investing heavily in AI infrastructure, with firms including Microsoft, Amazon, Alphabet and Meta collectively committing hundreds of billions of dollars to data centres and computing capacity.

Long-Term Growth Strategy

SpaceX expects its AI business to become a major source of future revenue as it expands computing capacity and secures additional cloud contracts.

At the same time, the company faces increasing competition in AI infrastructure, while legal challenges related to one of its data centre projects add another layer of uncertainty as it scales its operations.