Episode summary
Earnings Special: SpaceX’s AI Splurge Puts a Damper on Debut Earnings After IPO | Bloomberg...
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Carol Massar, Tim Stenovec · Guests: Ed Ludlow, Mandeep Singh
Summary
SpaceX’s first public quarterly report showed stronger-than-expected revenue, but the market focused on the company’s aggressive AI spending and weaker-than-expected Starlink growth. The host and guests said revenue of $7.8 billion beat Wall Street estimates, while the AI business posted an operating loss of $1.26 billion and second-quarter AI capex came in at $15.83 billion versus a $13.09 billion estimate. Shares fell sharply after the print as investors weighed heavy spending against a large backlog and improving AI economics.
The guest argued that SpaceX’s AI business is inflecting faster than expected, pointing to $2.56 billion of AI revenue versus about $800 million in the first quarter and a $47.5 billion backlog that could support stronger top-line growth over the next few quarters. The guest said the company still faces a valuation challenge, since it is already priced for substantial growth and margin improvement.
The conversation then compared SpaceX with AMD, where the host and guests saw a solid but not standout quarter. AMD’s guidance and data-center outlook were described as broadly in line with expectations, which was not enough to excite investors given the stock’s strong year-to-date run.
Key takeaways
- SpaceX revenue of $7.8 billion beat expectations, but the market sold the stock off on higher AI capex and a softer Starlink print.
- The guest said SpaceX’s AI revenue jumped to $2.56 billion from about $800 million in the prior quarter, suggesting faster-than-expected inflection.
- SpaceX reported a $47.5 billion backlog, which the guest said could drive accelerating top-line growth for the next three quarters.
- The guest said SpaceX’s valuation already assumes strong growth and margin improvement, making continued upside harder to deliver.
- AMD’s quarter was described as mostly in line, with no standout upside to offset investor disappointment after a strong run in the stock.
Notable quotes
“Revenue exceeded Wall Street's expectations, reported $7.8 billion. The company reported an operating loss though of $1.26 billion from its AI business”
“but you go into this saying this was the first quarterly earnings for SpaceX since they became a public company and it will be their first earnings call”
“they reported a backlog number of 47.5 billion. That tells you most of the backlog is likely coming from AI”
“the AI revenues are 2.56 billion right compare that to the first quarter which is data we got in the perspectives about 800 million so that's a quite a jump sequentially quarter to quarter”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. This is a breaking news update from Bloomberg. Instant reaction and analysis from our 3,000 journalists and analysts around the world.
SpaceX, the company out with its first report as a publicly traded company. Revenue exceeded Wall Street's expectations, reported $7.8 billion. The company reported an operating loss though of $1.26 billion from its AI business.
That's better than the consensus expectation. Shares have plunged since that IPO, erasing more than a trillion dollars in market value from their peak.
All right, let's get to it with our team. We've got a great team, too. Mandep Singh is with us right here in studio in our Bloomberg Interactive Broker studio.
Is Bloomberg Intelligence global head of technology research and out there in our San Francisco news bureau is of course our own Ed Ledllo, host of Bloomberg Tech. Um Ed, let me just kick it off with you. What jumps out here?
I know you're also on the live blog, but um you know, investors just kind of reading through.
Yeah. I mean, overall revenue and and sales came in above consensus, but you go into this saying this was the first quarterly earnings for SpaceX since they became a public company and it will be their first earnings call. And there was a lot of acceptance that the consensus numbers out there, there was a bit of skepticism, right?
They're a bit squishy because we don't have a whole lot of contemporaneous data. But it's really interesting, you know, the the status quo is still that Starlink is the is the driver on the top line and also sort of the cash cow, but they really improved the economics of this business in the quarter of yes, it's a rocket company, but renting compute capacity to other technology companies, you know, that has proved to be a strong business for them.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- spacex ai spending
- ipo earnings
- capital expenditures
- tech sector outlook
- market reaction
Companies and tickers mentioned
- SpaceX
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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