Elon Musk’s SpaceX is preparing to release its first earnings report as a publicly traded company. The report is expected after the market closes today. The earnings report is important because it will give investors their first chance to question SpaceX executives about the company’s business and future plans.
SpaceX started trading at $150 a share in mid-June, according to Business Insider. The stock has since fallen by about 25%. Its current price is around $114, which is also well below its $135 IPO price. The decline means investors are entering the first earnings report with more pressure and questions about SpaceX’s financial performance.
SpaceX revealed several important financial figures in its IPO paperwork. However, the earnings report will be different because analysts can now directly question company executives. Business Insider’s Jennifer Sor identified several major issues investors are likely to focus on during the earnings report.
Also read: Telegram returns to Apple App Store after brief child sexual abuse material ban
Thursday also marks the expiration of a lockup period for SpaceX shares. A lockup period prevents certain early investors from selling their shares for a set amount of time after an IPO. Once the restriction ends, early investors can potentially sell their shares and cash out. That could put additional pressure on SpaceX’s stock if large numbers of shares enter the market.
AI spending becomes a major question
{{/usCountry}}Thursday also marks the expiration of a lockup period for SpaceX shares. A lockup period prevents certain early investors from selling their shares for a set amount of time after an IPO. Once the restriction ends, early investors can potentially sell their shares and cash out. That could put additional pressure on SpaceX’s stock if large numbers of shares enter the market.
AI spending becomes a major question
{{/usCountry}}One of the biggest questions is how much money SpaceX plans to put into artificial intelligence. AI spending has become a major issue across the technology industry. Investors are closely watching how much companies spend on AI and whether those investments actually produce stronger business results.
Musk said Tesla should be spending on AI “as fast as we can.” Investors may now watch whether he takes a similar approach at SpaceX, according to Business Insider.
SpaceX's huge AI infrastructure
SpaceX is building a major data-center operation in the Memphis area. The project includes Colossus 1 and Colossus 2, two large supercomputers.
Investors are not only interested in how much SpaceX spends on AI. They also want to know how the company will use all the computing capacity it is building. The company has to decide whether to use the computing power for its own AI projects or generate money by renting it to other customers.
The company has rented out some of its homegrown computing capacity to make money. Business Insider noted that one deal could generate as much as $1.25 billion a month. This shows that SpaceX sees its computing infrastructure as something that can also become a major source of revenue.
Starlink remains critical
Until then, Starlink’s continued growth will be especially important. Investors will want to see strong subscriber growth and healthy profit margins. If Starlink’s subscriber numbers begin to slow, investors could become concerned. Falling margins could create another problem for the company. Business Insider said weaker Starlink performance could force Musk to speed up his timeline for other major SpaceX projects.
The Tesla question
There has been continued speculation that the companies could eventually work more closely together or even combine in some way. Musk did not suggest that Tesla and SpaceX were preparing to combine forces during that call. Business Insider said investors will now watch closely to see whether Musk also avoids discussing such a possibility during SpaceX’s first earnings report.
Investors want clarity on AI spending, computing infrastructure, Starlink growth and the company’s relationship with Tesla. The earnings call will give Wall Street its first major opportunity to question Musk and SpaceX executives directly since the company entered the public market. The answers could give investors a clearer idea of whether SpaceX can justify its huge valuation and regain confidence after its sharp post-IPO decline.