SpaceX stock is jittery ahead of Q2 earnings: what to expect?

SpaceX stock SPCX edged higher on Monday, in line with a broader market rally as investors looked ahead to the company's first quarterly earnings report as a publicly traded company.

The stock jumped about 1% in early trading.

The broader market advanced after President Donald Trump called off planned strikes against Iran, easing geopolitical tensions and sending oil prices lower on the first trading day of the month.

The Dow Jones Industrial Average rose 615 points, or 1.1%, while the S&P 500 gained 0.4% and the Nasdaq Composite advanced 0.2%.

Investors await first earnings report

SpaceX is scheduled to report second-quarter results after the market closes on Tuesday, marking its first earnings release since completing its June initial public offering.

Since its public debut on June 12, the stock has lost more than $500 billion in market value and has fallen more than 50% from its intraday high.

The shares are also coming off a fourth consecutive weekly decline.

The earnings release follows a closely watched reporting season for large technology companies, during which investors focused heavily on artificial intelligence spending plans and capital expenditure trends.

For SpaceX, investors are expected to focus less on quarterly results than on management's long-term outlook for its AI, satellite, and launch businesses.

The stock's valuation remains under scrutiny. With a market capitalization of about $1.4 trillion, SpaceX trades at a trailing price-to-sales ratio in the 70s while continuing to report significant losses and invest heavily in expansion.

Investor sentiment has also been weighed down by the prospect of additional share sales as rolling post-IPO lock-up restrictions begin expiring in the coming days.

AI investment remains in focus

Analysts expect SpaceX's AI business to generate $2.33 billion in revenue during the April-June quarter, according to LSEG data, representing a sharp acceleration from the previous quarter.

Revenue from the company's Starlink connectivity business is expected to reach $3.82 billion, while operating profit is forecast at $1.42 billion, up from $1.19 billion in the first quarter.

At the end of March, Starlink had 10.3 million subscribers, roughly double the level a year earlier, although average revenue per user declined nearly 25%.

SpaceX's AI expansion remained its largest area of investment. The company spent $7.72 billion on AI initiatives during the first quarter, accounting for about three-quarters of total capital expenditure.

Total capital expenditure is expected to increase to about $14 billion in the second quarter, with AI-related spending projected to rise more than sixfold from a year earlier to approximately $10 billion.

The company has signed AI computing agreements with customers, including Anthropic, Google, and Reflection AI, though investors will be looking for evidence that those investments are translating into sustainable growth.

Bernstein highlights long-term execution

Ahead of the earnings report, Bernstein reiterated its Outperform rating and $239 price target on SpaceX.

The firm said management's confidence in the company's long-term growth trajectory will be more important than the quarterly financial results themselves.

Bernstein identified four factors that it believes will determine SpaceX's long-term valuation: achieving rapid Starship reusability, securing sufficient semiconductor capacity, navigating regulatory approvals, and expanding AI computing capacity.

The firm's analysts said Starship's full reusability remains the cornerstone of the company's long-term investment case.

Bernstein's model assumes approximately 3,600 launches in 2031, a target it believes can only be achieved if both stages of the rocket become fully reusable.

The firm added that reaching its long-term launch assumptions would require at least daily launches, supported by a significant expansion in launch infrastructure.

SpaceX currently operates two launchpads and is adding two more, while also negotiating with state governments over the locations of an additional five or six facilities, according to Bernstein.