SpaceX stock falls 50% as Grok AI chatbot prospects worry investors

SpaceX reported its first quarterly loss as a public company on Tuesday, but the numbers weren't as bad as Wall Street feared. The Elon Musk-led rocket, satellite, and AI company posted a loss of $541 million, or 9 cents per share, less than half of what analysts had predicted. Revenue surged to $7.8 billion, up more than 90% year-over-year, driven largely by its connectivity business — Starlink — which saw revenue jump 66% as subscribers doubled to 12 million. Musk boasted on the analyst call that "it's not out of the question that Starlink will deliver a majority of the world's internet."

Despite the upbeat headline figures, investors remain skeptical. SpaceX stock rose 9% in regular trading but gave back most of those gains after hours, leaving the stock roughly 50% below its June peak following the IPO that briefly made Musk the world's first trillionaire. The core concerns: whether Grok, Musk's AI chatbot, can live up to its hype, and the company's aggressive spending. Capital expenditures on infrastructure and R&D jumped to $18 billion in the quarter, up from less than $3 billion a year ago. CFO Bret Johnsen said similar spending levels are expected for the next two quarters. Additionally, a lockup provision expiration later this week could let insiders sell shares, adding short-term volatility to the stock.