Why SpaceX Stock Dumped on Earnings

**Elon Musk** (0:00)
I know this sounds totally nuts, but you can probably scale to a thousand times the economy of Earth in terms of intelligence launch to space, but probably maybe even a million times.

**John Johnston** (0:17)
Hi everyone, JJ here. Welcome back. Well, the much anticipated SpaceX earnings were today the first as a public company, so there was a lot of interest in this. And the stock actually dumbed during the earnings, during the earnings call. It did not improve with Elon speaking. He has been known on Tesla calls to make these grand claims, and he did that this time. I'm going to make another video about this today because it's quite an event. But we can see there after hours, after the bell, after the stock market bell, it ended 7.46% down. It was over 8% at one point, as earnings come out and people digested it, and there was the earnings call. So we're going to have a look at what happened there. I mean, the headlines weren't too bad. SpaceX doubles revenue on Anthropic and Google Compute Deal, Starlink growth. So what happened there? Why did not investors like it? So we're going to look at that. There's some key takeaways here from Bloomberg, and Chris Norlund beaten me to it. Of course, SpaceX crashes after Elon call. So we'll listen to some of what Elon said there as well. But let's look at the headlines here. What happened?
What are they saying about it? And what could have happened there? I mean, it is a broken IPO at this point. I think it's gone down so much. It went out at a massive valuation. I do think Elon took full advantage of the AI bubble actually, because I do think there's an AI bubble, and I think he knows that. And so he took the time when the market is elevated to get as much money as possible for the company. I mean, they've got a lot of cash. That's one thing I noticed, and that's the IPO definitely helped there. So investors not necessarily unhappy about that, although pretty unhappy that it's gone down so much, that broken IPO at this point.
SpaceX doubled its revenue compared to last year, in large part thanks to the growth of its Starlink satellite internet service, and deals it struck to rent out computing power to Anthropic and Google, the company revealed in its first quarterly earnings call. I mean, there's already question marks over that, right? I mean, they're having to rent out this space because of XAI-built data centers and Grok is, what, 3% to 4% of the market of LLMs, of these chatbots, so they have to rent it out, and Elon's, I think, scrambling around to find clients, Anthropic and Google, and those contracts aren't, I don't think they're not necessarily long-term, so there's a question mark over that.
In the SpaceX prospectus, a massive part of the TAM, the Total Addressable Market, is supposed to be AI, so investors will be looking at that. Now, it wasn't so great. I mean, Elon made some grand claims, as usual, see that, but they say total sales grew from 4 billion in the second quarter of 2025 to 7.8 billion in Q2 2026 I mean, sales of 4 billion. Have a look at the market cap of this company.
I mean, does it match them, what it should be market cap? Still 1.65 trillion and that's after it's gone down. So just think about this. We're going through the numbers. There were massive multiples on this company. So it's got a lot to live up to and that's why I think Elon makes these grand claims, right? Yeah, so total sales of 4 billion in the second quarter. Nearly 2 billion of that growth came from its AI division where Starlink revenue also grew 1.7 billion. I mean, you know, it's not bad. They're making money, well, not profits, not profits at all, but revenue coming in. But they're just even in the billions, those low billions, it's just such a small amount considering the market cap. It's all future. It's all future, bro, which Elon talks about, you know, these grand claims.
The company still lost 544 million in the quarter, but that was down from 1 billion in the second quarter last year.
So, you know, not making money, but it's narrowing. SpaceX Chief Financial Officer Brett Johnson said on Tuesday that SpaceX has an additional 6.7 billion of cloud services revenue under contract over a six month period that begins ramping starting in October of this year. He also said he believes that once it fully integrates an AI startup cursor, that it will reach a 100 billion dollar annualized revenue run rate. Okay, so, you know, the executives of the company make these claims, not claims, they're talking about the actual business, and then Elon comes in and has massive claims above that, which I'll talk about in the next one on this video, because he really does, you know, make these grand claims. We'll see a little bit of that.