To The Moon

Now that $SpaceX(SPCX)$ Q2 2026 earnings are out, let’s take a look and see whether the post I had shared yesterday holds true. Click here ! for yesterday’s post.

In its first earnings report since going public on 12 Jun 2026, SPCX revenue nearly doubled, fueled by its booming Starlink satellite communications and AI businesses, but executives flagged the spending spree underpinning its lofty ambitions ‌is far from over.

The company led by Elon Musk said:

• It expected a $100 billion revenue run-rate by December 2026,

• Promised a less than one-year payback on new capital deployments for AI compute, and

• Forecast it would launch at least 1,000 next-generation V3 Starlink satellites within a year.

• It also laid out plans to take on mobile phone providers.

Above are lofty forecasts.

Based on Musk’s track record about $Tesla Motors(TSLA)$ robotaxi’s dominance by end 2026, its forward looking cybertrucks etc…seasoned investors would more than take it with a pinch of salt, no ?

Still, the results for the quarter ended 30 Jun 2026, offered shareholders an early test of the investment case behind SPCX's $1.75 trillion valuation: that profits from its ​fast-growing satellite internet business can fund an expensive push into (i) AI, (ii) data centers and (iii) next-generation rockets until those ventures mature into significant businesses of their own.

While the company's AI unit ​showed signs of gaining commercial traction, management signaled that the spending required to build it remains enormous.

In a post-earnings call, Musk personally said - "we're building AI compute capacity at scale faster than anyone ⁠else, we believe, and we're significantly improving our AI models".

Q2 2026 Earnings.

Revenue : came in at $7.81 billion vs $6.81 –$6.93 billion market estimates vs Q2 2025’s $4.1 billion; that’s a +92% YoY gain. (see below)

Analysis:

• Starlink accounted for over half of SPCX’s total revenue, 54.91% to be exact.

• YoY, it grew by +65.8% - this is SPCX’s cash cow.

• SpaceX’s AI which Musk has pitched as the company’s future growth driver,surged by +247.49% YoY.

Loss per share: was -$0.09 vs -$0.23 to -$0.26 market estimates vs Q2 2025’s -$0.34; that’s a +73.53% YoY improvement.

EBITDA (adjusted) : was $3.5 billion vs Q2 2025’s $1.2 billion; that’s a +191% YoY gain.

Capex.

Apart from earnings, most investors of late are paying close attention to tech stock’s capex.

When they don’t like what they see, investors do not hesitate to let it be known.

This was partly the reason why both $Alphabet(GOOG)$ & $Meta Platforms, Inc.(META)$ stocks’ prices fell, post quarterly earnings announcement.

Both companies have increased their capex (GOOG from $180 - $190 billion to $195 - $205 billion, META from $27.06 billion to $42.03 billion) in light of AI build out.

In the case of SPCX, total capital expenditure surged +536% YoY from $2.83 billion to over $18 billion, driven primarily by $15.83 billion dedicated to AI investments compared to just $749 million in the Q2 2025. (see above)

It does not help that SPCX’s CFO Bret Johnsen further iterated that he expects capital spending would be similar for the next couple of quarters.

The central question for SPCX's first quarter as a public company was whether the machine underneath the story actually works ?

On that question, Musk and team at SPCX delivered a few positives ​said Thomas Monteiro, analyst @Investing.com.

Revenue vs Capex.

For Q2 2026, total capex ($18.37 billion) exceeded total revenue ($7.81 billion) by a factor of 2.35x.

AI capex alone represented over 202% of total Q2 revenue, underscoring management's decision to prioritize upfront compute infrastructure over near-term cash flow generation.

On a brighter note, annualized revenue is forecasted to scale from $31+ billion to $100 billion by December 2026 as additional compute capacity and cloud service contracts ramp up starting in October 2026.

Wall Street analysts extrapolated these current trends to project future results.

They expect capital expenditures to taper off heading into 2027. At the same time, new AI compute capacity should achieve high utilization.

Because of these factors, SPCX is projected to erase its remaining -$143 million operating loss. Ultimately, the company is expected to achieve full quarterly GAAP net profitability within 4 to 6 quarters.

In short, the company is not expected to make a profit for at least another year.

Descend Begins ?

SPCX shares fell -10.97% in after-hours trading after rising 9.4% during the day, ahead of the publication of results. (see below)

It is a fact that SPCX has declined -22.13% since its record-breaking IPO in ​June 2026.

As mentioned in my previous post, it could face additional pressure from expiry of SPCX's post-IPO lock-up period starting on Thu, 06 Aug 2026 - that may unleash a wave of insider and early-investor shares on the market.

Casting earnings and capex aside, how does each constituent business within SPCX measures up ?

Starlink.

Starlink and SPCX's broader connectivity operations ‌remain the company's ⁠primary financial engine, underpinning Musk's AI push.

However, critics have long argued that the strategy of using Starlink's profits to bankroll the AI business and Starship launch operations until constituent businesses can stand on their own is unsustainable.

SPCX constituent biz - Operating loss & profit

Operations Losses.

Total Q2 2026 operating losses narrowed to -$143 million from Q2 2025’s -$970 million.

• Operating losses in AI narrowed to -$1.26 billion from -$1.52 billion.

• Operating income at Starlink grew to $1.66 billion from $923 million; that’s a +79.41% YoY growth.

According to Zacks Investment Management, Chief market strategist, Brian Mulberry, it is a tremendous upside surprise that AI is already monetizing itself and not relying on Starlink to fund operations - a huge part of the SPCX story.

SPCX, President, Gwynne Shotwell has also said:

• She expects SPCX ​to snatch "quite a few" of (a) $T-Mobile US(TMUS)$, (b) $AT&T Inc(T)$ and (c) $Verizon(VZ)$ customers with the Starlink business.

• At the same time, it aims ⁠to build out ground-based infrastructure to complement its satellite network for "a true mobile service."

Starlink, the company's satellite-internet unit, aided by a growing range of consumer, enterprise, aviation, maritime & government services, doubled subscribers to 12 million at the end of Q2 2026.

However, average revenue ​per subscriber slumped -22% YoY as SPCX entered more international markets and rolled out lower-priced plans.

AI Business Group.

SPCX's AI business that includes (i) xAI, (ii) Grok, ​(iii) social media platform X, and (iv) a ⁠rapidly expanding data center operation, has been its biggest area of investment.

The business is generating revenue from compute contracts with Anthropic, Alphabet's Google and Reflection AI, though a portion of its recurring revenue has yet to be recognized.

It is a pity that there is no further drill down within the SPCX’s AI business group to know which is/are the dead weight in the group, but I am sure investors who have followed Musk since the TSLA days are aware.

According to CEO, Musk - SPCX is expected to have built more than 2 gigawatts (GW) of computing capacity in 2026 and by the end of 2027, it will have close to 10 GW of computing.

SPCX also plan to use $NVIDIA(NVDA)$ hardware ⁠exclusively to build ​its data centers, with NVDA CEO Jensen Huang saying each gigawatt of computing capacity generates roughly $40 - $50 billion ​of revenue for the company. (see below)

Not to dwell too much into this but it’s just marketing ploy to me. I hear it but won’t get too excited about it.

Space.

Space revenue grew +29% YoY. The business, which includes (a) commercial launches, (b) government missions and (c) development of Starship, remains a significant source of costs and uncertainty.

In recent years, SPCX has increasingly prioritized launches for its own satellite ​network over third-party payloads, while continuing to absorb significant costs tied to Starship's development.

This should be looked upon as favourable because:

• Revenue: The prioritization will accelerate Starlink’s own deployment, rapidly expanding high-margin subscription revenue that stood at $4.29 billion in Q2 2026.

• Capex: Starship development costs keep near-term capital expenditures elevated, resulting in operating losses ($542 million in Q2), but scaling Starship will lower long-term per-kilogram deployment costs and in the process lower capex needed to deploy future satellite generations.

After all that has been said and done, investors face a stark choice.

• They can wait until 2027 for cash flow to stabilize and GAAP profitability to materialize.

• Alternatively, investors can take a leap of faith, invest now and bet that Starlink’s surging revenue and rapid AI monetization will outweigh near-term quarterly operating losses, heavy capex, and the execution risks tied to Musk’s aggressive growth targets.

Are you a ‘show me the money’ or ‘Elon’s fanboy / fangirl” type of investor ? Tell me !

Remember to check out my other posts. (See below). Help to Repost ok, Thanks.

Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks.

• SCHD vs FDVV - the Better Income ETF !

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• US market rally to Earnings or Econ data ?

• Do you think SPCX’s Q2 2026 earnings have been credible so far?

• Do you think SPCX targets ‘promised’ by CEO Musk are believable & achievable ?

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