SpaceX shares tumbled more than 11% in pre-market trading Thursday, erasing gains from the company's first-ever earnings report — a report that actually beat Wall Street's expectations. The sell-off came as investors focused on the company's massive artificial intelligence spending rather than its quarterly profit.
Earnings beat but investors sell
SpaceX reported its first quarterly earnings as a public company late Wednesday. The numbers topped analyst forecasts on both revenue and earnings per share. But the market reaction was swift and negative. By early Thursday, shares of the stock, which trades under the ticker SPCX, were down sharply in pre-market action.
The disconnect between the earnings beat and the stock price drop highlights a growing tension in the market: investors are rewarding AI spending in some sectors but punishing it in others. For SpaceX, the concern is that its heavy investment in artificial intelligence — particularly for satellite constellation management and launch optimization — is eating into margins without a clear near-term payoff.
Analyst cuts price target to $140
At least one analyst responded to the post-earnings sell-off by lowering the price target on SPCX to $140. That's a significant cut from previous targets, though it still implies some upside from the pre-market price. The analyst cited the AI spending as the primary reason for the reduction, noting that the company's capital expenditure plans are larger than expected.
The new $140 target is now the lowest among major Wall Street firms covering SpaceX. Other analysts have maintained their ratings but are watching closely for signs that the AI investments will translate into revenue growth.
Why AI spending spooks the market
SpaceX isn't alone in facing investor scrutiny over AI costs. Across the tech and aerospace sectors, companies that have announced big AI budgets have seen their stocks punished if they can't show immediate returns. SpaceX's situation is unique because its AI push is tied to its core operations — Starlink network optimization, autonomous landing systems, and launch scheduling — rather than a separate product line.
That makes the spending harder to isolate. Investors worry that the AI costs could persist for years before they start paying off, especially as SpaceX ramps up Starlink's capacity and prepares for more frequent Starship launches. The company has said the AI investments are essential for long-term competitiveness, but the market is demanding proof sooner rather than later.
What comes next for SPCX
Spacex's next earnings call will be closely watched for any update on AI spending plans and whether the company can show early returns. The stock's pre-market drop suggests that even a beat on earnings isn't enough to calm investors who are laser-focused on the AI expense line. Whether the analyst's $140 target holds or gets revised further depends on how quickly SpaceX can turn its AI bets into bottom-line results.
