Since going public in June, Space Exploration Technologies (NASDAQ: SPCX) has already experienced a full market cycle. Although shares were priced at $135, SpaceX stock opened closer to $150. From there, Elon Musk's space empire witnessed extreme volatility, even for an IPO stock -- ripping to an all-time high of roughly $226 before sliding all the way to $105 and eventually bouncing back toward $155.
This opening pop, fade, and subsequent rebound perfectly capture what happens when a tiny float meets giant expectations. With SpaceX's third-quarter earnings report expected in November, the question smart investors are asking is whether this bounce is a setup or a trap. This Rare Signal Is Flashing Again.
In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » SpaceX disclosed first-quarter numbers in its S-1 filing ahead of the IPO.
The company's business model is split into three categories: space, connectivity, and artificial intelligence (AI). Total revenue came in around $4.7 billion, up 15% year over year. Connectivity carried the company, with Starlink generating $3.3 billion in sales and about $1.2 billion in operating income.
The space side of the business looked more like a development shop, with launch revenue totaling $619 million and bleeding a $662 million operating loss as research and development (R&D) costs for Starship chewed through $930 million. The AI segment is the newer part of SpaceX's story. During the first quarter, AI booked just $818 million -- barely half of which came from true AI infrastructure rather than advertising.
Even worse, this division lost $2.5 billion from operations. The number that investors need to keep an eye on is capital spending. AI capital expenditures (capex) reached $7.7 billion during the first quarter, on top of $1.05 billion for the space business and $1.3 billion for broadband.
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