SpaceX Stock Drops 11% on Capital Spending Fears and Lockup Expiration
SpaceX's stock dropped by 11% in pre-market trading as investors focused on the company's heavy capital spending and the impending expiration of an insider share lockup. Despite posting a stronger-than-expected first earnings report, SpaceX spent $18.4 billion to expand its Starlink, Starship, and AI infrastructure.
The company reported revenue of $7.8 billion, a 92% increase from the previous year, and adjusted EBITDA nearly tripled to $3.5 billion. However, SpaceX posted a net loss of $541 million due to these significant capital expenditures.
SpaceX also held onto its 18,712 Bitcoin on its balance sheet, taking a fair-value hit of approximately $195 million in value during the quarter. This added volatility to the company's earnings report.
JPMorgan raised its price target for SpaceX to $240 from $225 and projected that the company's capital expenditures will reach nearly $200 billion in both 2027 and 2028, putting additional pressure on free cash flow. However, Raymond James reiterated its Street-high price target of $800, citing strong operating performance.