Aug. 5 (Reuters) - SpaceX SPCX.O touted faster-than-expected returns from its AI spending on its first-ever earnings call as a public company.
But investors remained concerned about how long its profitable Starlink business could continue to bankroll costly investments in data centers and Nvidia NVDA.O chips.
The company's shares fell about 12% on Wednesday, dropping well below their $135 IPO price in less than two months since the company's blockbuster debut.
"With capex expected to remain elevated and investor enthusiasm cooling, I believe the stock could remain under pressure ahead of the lock-up expiration," said Carolane de Palmas, market analyst at brokerage ActivTrades.
"That could translate into significant volatility as markets reassess SpaceX's valuation and cash-burn trajectory."
SpaceX reported AI revenue that more than tripled from a year earlier and disclosed several new cloud computing agreements, even as quarterly capital spending on AI climbed to $15.8 billion.
Chief Financial Officer Bret Johnsen said the economics of those investments were improving rapidly, but also signaled that AI spending would remain elevated.
"The current economics have translated into a less than one-year payback on our new capital deployments for compute," Johnsen said, adding that SpaceX had signed another $6.7 billion in cloud computing contracts since the end of the second quarter and was on track to reach a $100 billion annualized revenue run rate by the end of the year.
That stands in contrast to traditional data center investments, which typically take years to recover their upfront costs.
"Elon has continued to surprise investors on what innovation and technology can do, but there has always been a mismatch in terms of the time frame of when that execution is going to occur," David Wagner, portfolio manager at Aptus Capital Advisors, said, referring to Musk's often-rosy outlook at his EV company Tesla TSLA.O that he has regularly missed.
"I believe the numbers. I would say that yes, those numbers are aggressive, but it's not a fantasy. The pieces exist, they just require flawless execution."
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