SpaceX is reporting its first quarterly earnings as a public company on Tuesday, and investors are bracing for tough questions about why the rocket maker has lost nearly half its value in just two months. Elon Musk's space venture soared to a record $225.64 per share in mid-June, briefly making him the world's first trillionaire. But the stock has since cratered to $114.46, erasing roughly $550 billion from Musk's net worth and leaving shareholders wondering if they bought into hype rather than a sustainable business.

The earnings call, scheduled for 4:30 p.m. ET on Tuesday, comes at a critical moment. SpaceX is expected to report a net loss of $1.9 billion for the second quarter alone, according to analyst surveys. That's on top of $4.9 billion in losses last year, largely driven by massive spending on artificial intelligence infrastructure after the company merged with Musk's xAI division in February.

What Happened to SpaceX's Stock Price?

SpaceX's dramatic decline reflects a collision between investor euphoria and market reality. When the company went public in June with an IPO price of $135, it raised a record $85.7 billion despite having just lost more than $4 billion in the prior three-month period. The stock jumped 19% on its first trading day, creating an artificial scarcity that drove prices higher. Unlike typical IPOs where roughly 20% of shares enter public circulation, SpaceX released less than 5% of its total equity, creating intense demand among limited supply.

That scarcity is about to end. On Thursday, the first lockup expiration will release more than 900 million shares for trading, more than doubling the amount currently available. Short sellers have already positioned themselves aggressively, betting against the stock. Short interest has skyrocketed 841% since mid-June, rising from 23.3 million shares to 219.3 million shares by late July, representing more than one-third of all publicly available shares. These investors have accumulated roughly $8.3 billion in paper profits as the stock has fallen.

Why Is SpaceX Losing So Much Money?

SpaceX's losses stem from two main sources: its struggling Starship rocket program and its money-losing AI business. The company spent $3 billion on research and development last year specifically on Starship, the experimental 396-foot-tall rocket that Musk has positioned as central to his most ambitious dreams, from Mars colonization to orbital data centers.

Yet after three years of test launches, Starship continues to suffer setbacks. In July, SpaceX aborted a test launch due to engine failures. When the company resumed testing a week later, the Super Heavy booster experienced a failure for the second time in a row. While the launch did successfully deploy next-generation Starlink satellites, those satellites were incinerated in the atmosphere rather than reaching low-Earth orbit because Starship has yet to achieve a full orbital flight.

The AI division is an even bigger drain. After xAI posted $6.4 billion in operating losses in 2025, the merged company burned $7.72 billion on capital expenditures in just the first quarter of 2026 alone, representing about 76% of SpaceX's total capital spending. Unlike competitors like OpenAI, Anthropic, and Google, xAI has not yet converted its spending spree into major corporate contracts. Instead, SpaceX has been forced to sell excess computational power from its data centers to Anthropic, Google, and Reflection AI to generate revenue.

What Questions Will Investors Ask at the Earnings Call?

Analysts expect Musk and SpaceX's leadership to face scrutiny on several fronts. Bank of America's senior aerospace and defense analyst Ron Epstein emphasized that the most important focus will be Starship's progress and the path to reusability. Investors will want to know what went well, what surprised the company, and what fell short of expectations in recent test flights.

Beyond Starship, investors are watching three key areas:

• Starlink Profitability: Starlink is currently SpaceX's only profit generator, bringing in revenue from direct consumer sales, government contracts, and military agencies. Analysts want to understand subscription growth rates and whether satellite internet can remain profitable as competition intensifies.
• AI Infrastructure Monetization: SpaceX has signed deals with Google ($920 million per month), Anthropic, and Reflection AI ($150 million per month) to use its data center capacity. Investors need clarity on whether these are temporary revenue patches or signals of a sustainable cloud infrastructure business.
• Capital Expenditure Plans: With the company burning billions on AI infrastructure and Starship development, shareholders want to understand how much more capital will be required and when the company expects to reach profitability.

There's also the elephant in the room: rumors of a potential merger between SpaceX and Tesla. The Wall Street Journal reported last week that some Tesla executives have been told to prepare for a separation of the China business ahead of a possible combination. Musk dismissed the report as "fake news," but securities regulations may prevent him from discussing the matter in detail during the earnings call.

How to Interpret SpaceX's Earnings Report

When SpaceX releases its results, here are the key metrics to watch:

• Revenue Breakdown by Segment: Analysts expect Space segment revenue of $835 million, Connectivity (Starlink) revenue of $3.83 billion, and AI segment revenue of $2.18 billion. Compare these to actual results to gauge whether the company is meeting expectations in each business line.
• Operating Losses and Burn Rate: SpaceX is expected to report a loss per share of 26 cents for the quarter. Watch whether losses are narrowing or widening, and whether management provides guidance on when the company expects to achieve profitability.
• Capital Expenditure Trends: Monitor how much SpaceX is spending on Starship development versus AI infrastructure. This will signal whether Musk is prioritizing near-term profitability or long-term moonshots.
• Management Commentary on Starship: Listen carefully to how executives characterize recent test failures and what timeline they're providing for achieving full orbital reusability, which is essential to the company's long-term business model.

New Street Research partner James Ratzer outlined a three-part success story for Starlink that could provide context for the earnings discussion. The first element is broadband expansion, with capacity expected to grow 20 times its current level. The second is developing a direct-to-sell business with a separate satellite constellation complementary to existing wireless offerings. The third, which Ratzer called "potentially the biggest opportunity," is orbital data centers with a separate AI constellation, though he cautioned this will take years to develop.

What Do Analysts Expect Going Forward?

Wall Street is divided on SpaceX's prospects. Some analysts have penciled in a strong rebound for the rest of 2026 that could return the company to profitability, but others are far more skeptical. Morningstar equity analyst Nicolas Owens assigned only a 7% probability to a scenario in which both Starship becomes fully reusable and scaled orbital data centers succeed, citing this low probability as a reason his fair value estimate of $63 per share is far below the current trading price.

The core tension is whether Musk's vision of space-based AI infrastructure and Mars colonization represents genuine business opportunities or expensive science fiction. SpaceX's only current profit generator, Starlink, operates in a market that is not hugely profitable. While satellite internet has important use cases during natural disasters, aboard aircraft and ships, and for rural customers, it remains inferior to terrestrial broadband in terms of network speeds, reliability, and costs.

Musk has a history of revising timelines for his most ambitious goals. He claimed in 2011 that SpaceX would reach Mars within 10 years, then revised that prediction multiple times. In March 2025, he said "Starship departs for Mars at the end of next year, carrying Optimus," with human landings potentially starting as soon as 2029, though he acknowledged 2031 is more likely. Investors will be watching to see whether he provides updated timelines during Tuesday's earnings call and whether those timelines are realistic given recent test failures.

The earnings call represents a crucial test of whether SpaceX can convince Wall Street that its losses are temporary investments in transformative technologies, or whether the company has oversold its prospects to investors who are now facing the reality of a business that is not yet profitable and faces significant technical challenges.

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