SpaceX shares plummeted 11% in pre-market trading Wednesday. The selloff came despite earnings that beat expectations, with revenue jumping 92% to $7.8 billion and adjusted EBITDA nearly tripling to $3.5 billion. What spooked the market was different. Investors fixated on the company's aggressive spending and an insider lockup expiration scheduled for Thursday.
The space company burned through $18.4 billion last quarter expanding Starlink, Starship, and AI infrastructure. Yet it still posted a $541 million net loss. JPMorgan now projects SpaceX will need nearly $200 billion in capital expenditures for both 2027 and 2028, a figure that will further squeeze free cash flow when the hyperscaler spending spree intensifies across the sector.
There's also the bitcoin situation. SpaceX held all 18,712 coins on its balance sheet, worth roughly $1.1 billion by quarter-end. The position lost about $195 million in value during the three months, adding unwanted volatility to earnings that flows through quarterly results under fair-value accounting rules. The company made no sales, keeping the full stake intact.
JPMorgan raised its price target to $240 from $225, but the boost landed in a market already nervous about what happens Thursday when the lockup expires and insiders can begin selling. The math is simple. Revenue growth looks strong. But spending has become the story, and it's one that's harder to love at these valuations.
This report is informational only and should not be construed as financial advice. Cryptocurrency and equity markets carry inherent risks.
