Share<\/a><\/p>\n With reports suggesting that a deal to reopen the strait of Hormuz again is \u201cimminent\u201d, analysis from Capital Economics outlines five key factors to watch over the coming weeks and months.<\/p>\n David Oxley, chief climate and commodities economist at Capital Economics, said:<\/p>\n double quotation mark1. Tanker traffic through the strait of Hormuz slumped back to a near standstill following the post-memorandum of understanding resumption in fighting and has remained well below usual levels in recent weeks. (Note that the situation continues to be obscured by so-called \u2018dark\u2019 transits and loadings, under which ship operators deliberately turn off their transponders.) There would presumably be a temporary spike in ships leaving again as\/when the waterway reopens. But the fact that there is less oil trapped in the Gulf than in June suggests that the exodus will be smaller and so prices won\u2019t fall as far as they did following the first MoU agreement\u2026 any new deal between the US and Iran could clearly fall apart once again, particularly as discussions turn to longer-term issue of Iran\u2019s nuclear ambitions.<\/p>\n 2. Oil exports from the Middle East have increased since the low in May, but was still 9m barrels a day lower in July than its pre-war level\u2026 A return of refining capacity from the Middle East \u2013 which accounts for about 11% of global refining capacity \u2013 would help to boost the supply of refined products<\/p>\n 3. Having fallen sharply since the start of the war, commercial oil stocks could still flirt with severely depleted levels in Q3, even if the Strait were to reopen quickly. That said, the pace of drawdowns will probably slow over the coming months if energy flows increase sustainably and this should be sufficient to avoid a severely adverse outcome.<\/p>\n 4. Offsets: The sharp drop in China\u2019s crude oil imports and pick-up in US petroleum exports have both helped to cushion the blow of the Hormuz crisis on global oil markets. It remains to be seen how quickly these offsets fade and how this will sequence with developments in the Middle East.<\/p>\n 5. The fact that the start of the Hormuz crisis coincided with the usual seasonal lull in global natural gas demand had helped to offset the loss of LNG supply. However, given that the seasonal pick-up in demand over the northern hemisphere winter is approaching with gas storage levels in Europe far lower than in recent yearsm the relief to natural gas prices from a reopening of the Strait and a pick-up in LNG supply will be limited in the near term.<\/p>\n Oxley concludes:<\/p>\n double quotation markAll told, while there is now a reduced risk of adverse scenarios, energy supply from the Gulf is likely to remain constrained for several months and this will limit the scope for further falls in prices. Under our baseline assumptions, we think that Brent crude prices are likely to end this year at $75 a barrel while EU natural gas prices will remain close to current levels (\u20ac50-55 per MWh) over the northern hemisphere winter.<\/p>\n Share<\/a>Cost of filling up a tank of diesel reaches \u00a3100<\/p>\n The cost of filling up a tank of diesel has reached \u00a3100 while petrol prices hit a new Iran war high \u2013 bad news for families heading on their summer getaways.<\/p>\n The average price of a litre of petrol rose to a new Iran war high of 161.5p on Wednesday, a jump of nearly 11p since its 6 July low, up 7%, the RAC motoring group reports.<\/p>\n Diesel has gone up even more, rising almost 17p a litre to 181.5p \u2013 a rise of 10% \u2013 since a conflict low point of 164.5p on 9 July.<\/p>\n The RAC\u2019s head of policy Simon Williams said:<\/p>\n double quotation markThis means the cost of a full tank of diesel for a 55-litre family car is once again at \u00a3100, something drivers haven\u2019t had to endure since early June, while the petrol equivalent is \u00a389, the highest it\u2019s been since the war in the Middle East began on 28 February.<\/p>\n But with the price of crude oil falling to just below $80 on Tuesday there is hope on the horizon for drivers on the back of news of supply disruptions in the Strait of Hormuz potentially being eased. Daily price rises should come to a halt and reductions should start to appear, providing the cost of a barrel stays around this level.<\/p>\n After oil prices fell sharply in the last couple of days on hopes of an interim deal between the US and Iran that would allow safe traffic through the strait of Hormuz, crude is on the rise again.<\/p>\n Brent crude, the global benchmark, is up $1.35 at $80.71 a barrel, a 1.7% increase on the day. Yemen\u2019s Iran-aligned Houthi rebels said they attacked a Saudi oil tanker in the Red Sea.<\/p>\n Share<\/a> Here\u2019s a fuller take on the UK and eurozone survey data out this morning, from my colleague Phillip Inman on the economics desk.<\/p>\n The UK\u2019s private sector has proved to be more resilient than expected in July, giving a boost to chancellor John Healey as he begins to prepare for labour\u2019s third budget in the autumn.<\/p>\n The manufacturing and services sectors defied predictions that they would suffer a downturn as events in the Middle East created global uncertainty and pushed up the price of raw materials, components and transport costs.<\/p>\n Analysts said the S&P Global surveys of the UK\u2019s major industries showed the economy would expand by about 0.2% in the third quarter of this year, compared with a forecast by the Bank of England only last week of flat growth in July, August and September. (The full breakdown of the surveys can be found here<\/a>.)<\/p>\n Rob Wood, chief UK economist at the consultancy Pantheon Macroeconomics, said the improvement was surprising and \u201cconsistent with 0.2% quarter-to-quarter GDP growth\u201d.<\/p>\n He said firms were continuing to lay off workers, but at a much reduced rate, leaving the private sector in a more robust state than expected a few months ago.<\/p>\n Matt Swannell, chief economic adviser to the consultancy, the ITEM Club, cautioned that July\u2019s final S&P Global survey, which showed the services sector reversing a period of contracting after the PMI rose to 52.1 from 48.8 in June, could be shortlived.<\/p>\n double quotation markWe expect the economy will weaken in the second half of the year. Inflation has probably now passed its low point, with July\u2019s 13% rise in the energy price cap kickstarting a series of upward pressures.<\/p>\n This will put pressure on real disposable income, which we expect to decline in the third and fourth quarters. Monetary and fiscal policy will also remain restrictive in the near term.<\/p>\n A survey of firms across the eurozone registered a similar trend. The July S&P Global PMI composite survey showed<\/a> output and new business volumes rose to 52.0, and at the fastest rate since last November.<\/p>\n Spain\u2019s private sector was the fastest growing in the major eurozone economies, followed by Italy.<\/p>\n France and Germany continued to contract, but at a much slower pace after significant turnarounds between June and July.<\/p>\n The truce in the Middle East was considered to be one of the major factors, boosting consumer confidence and allowing firms to expand production.<\/p>\n S&P Global said business confidence across the eurozone rose to a five-month high, but remained below the level seen immediately prior to the outbreak of the Middle East war.<\/p>\n Share<\/a>UK regulator simplifies IPO rules while another four firms cancel secondary listings<\/p>\n The UK\u2019s financial watchdog has simplified rules for stock market flotations, in a bid to stem the exodus of companies from the London stock market.<\/p>\n The changes announced by the Financial Conduct Authority (FCA) will allow the UK listings market to compete more effectively with global markets, it said.<\/p>\n The reforms will reduce execution risk for issuers, lower compliance costs and make it easier for companies to access public markets. As part of the changes, the FCA will remove the sseven-day waiting period for connected research during an IPO and simplify information-sharing requirements for issuers and firms.<\/p>\n Jon Relleen, director of infrastructure and exchanges at the FCA, said:<\/p>\n double quotation markWe want the UK market to be an attractive place for companies to raise capital and grow. By making the UK listing regime more efficient, we are supporting the growth and competitiveness of UK capital markets.<\/p>\n The news came as it emerged that four businesses have quietly left through the back door in the past 105 days by cancelling their secondary listings on the London Stock Exchange.<\/p>\n CRH, Smurfit WestRock, Ferguson and Flutter Entertainment have all now fully departed and are now solely listed in New York, with Flutter becoming the latest yesterday.<\/p>\n Claire Trachet, chief executive of fundraising and M&A advisory firm Trachet, said the LSE risks becoming trapped in a vicious circle.<\/p>\n Some reduction in London trading is natural when a company moves its primary listing overseas. But London\u2019s longstanding liquidity shortage accelerates that decline, leaving companies paying fees and compliance costs for an increasingly inactive market, she said.<\/p>\n double quotation markWhile everyone is watching companies leave through the front door via high-profile takeovers, a growing number are also slipping out through the back by cancelling the secondary listings they retained after moving their primary market overseas.<\/p>\n Of course, secondary listings don\u2019t carry the same weight as primary ones, but they still preserve trading activity, access for UK investors and London\u2019s visible connection to major international companies. Cancelling them removes that important foothold entirely.<\/p>\n In 1997, \u00a31 in every \u00a32 invested by British pension funds went into UK shares – today it is closer to \u00a31 in every \u00a320. She added:<\/p>\n double quotation markAs the LSE loses its international shine, the prestige of retaining a London badge is also becoming harder to justify: companies are increasingly unwilling to pay for a listing delivering diminishing financial and reputational value. Wise, which moved its primary listing to Nasdaq in May while retaining London as a secondary venue, is now the company to watch.<\/p>\n The worry is that the growing drumbeat of departures and negative headlines becomes self-reinforcing, gradually diminishing the reputational value of retaining a London presence. Not long ago, the practical benefits and prestige associated with the LSE would have justified the costs of maintaining a secondary listing. Companies now appear increasingly unwilling to pay the fees and compliance costs for a presence they feel is delivering diminishing value.<\/p>\n All eyes should now be on what prime minister Andy Burnham and chancellor John Healey do to inject life back into the market. London had 2,365 listed companies ten years ago, compared with around 1,500 today. Stopping that bleeding is vital not only for the City, but for the wider economy and the thousands of highly skilled jobs supported by its capital-markets ecosystem.<\/p>\n Share<\/a><\/p>\n Updated at\u00a006.31 EDT<\/p>\n Video game maker EA bought by Saudi-led group for $55bn<\/p>\n Electronic Arts, the maker of video games such as The Sims, Madden NFL and Battlefield, has been bought by Saudi Arabia\u2019s wealth fund and a group of investors for $55bn (\u00a341bn).<\/p>\n The company announced the completion of the deal on Tuesday evening, only days after the EU gave its approval, the final regulatory green light needed.<\/p>\n EA Sports FC 26 PS5 Game Photograph: PR Image<\/p>\n EA is best known for its blockbuster sports games including EA Sports FC (previously called Fifa). In what is one of the biggest buyouts on record, EA Games<\/a> is being taken private, ending its 36-year history as a publicly traded company.<\/p>\n The company has been bought by Saudi Arabia\u2019s PIF along with Affinity Partners, a private equity company run by Donald Trump\u2019s son-in-law Jared Kushner<\/a> and the private equity firm Silver Lake Partners.<\/p>\n Share<\/a>Next upgrades profit outlook again as it benefits from summer spending<\/p>\n Some more corporate news\u2026 Next has raised hopes that UK shoppers are still willing to spend despite pressures on household budgets, as it upgraded its profit guidance for the third time this year.<\/p>\n The clothing and homeware retailer said it benefited from sunny weather <\/a>and the release of some \u201cpent-up demand\u201d in the Middle East and northern Europe in the 13 weeks ended on 1 August.<\/p>\n Next shop window. Photograph: David Burton\/Alamy<\/p>\n Next, which owns the UK rights to the US brands Gap and Victoria\u2019s Secret as well as stakes in a plethora of labels including Reiss and Joules, said its full-price sales rose by 9% in the second quarter compared with the same period last year, more than double its initial estimate of a 4% rise.<\/p>\n The FTSE 100 company, which has more than 500 stores across the country, has a long history of pushing expectations higher and then beating them.<\/p>\n Share<\/a><\/p>\n Updated at\u00a005.46 EDT<\/p>\n OpenAI and Anthropic models \u2018went rogue\u2019 during UK cybersecurity test<\/p>\n Advanced AI models developed by OpenAI and Anthropic<\/a> went rogue during a cybersecurity test and showed a new type of risk posed by the technology, according to the UK\u2019s AI Security Institute.<\/p>\n AISI described the actions carried out by the agents \u2013 the term for AI systems that can perform tasks without human help \u2013 as a \u201cserious incident\u201d. In one example, an agent powered by Anthropic\u2019s Mythos model sent targeted emails to people.<\/p>\n AISI said the rogue behaviour was carried out by agents powered by two models \u2013 Anthropic\u2019s Mythos 5 and OpenAI\u2019s GPT-5.6 Sol.<\/p>\n AISI said it detected unusual activity during a routine cybersecurity test for AI models on 28 July. It found that some of the agents had engaged in \u201csustained, potentially harmful activity directed at real people and organisations\u201d. It took an hour to contain the incident.<\/p>\n Share<\/a>Eurozone business activity hits eight-month high as services post first increase since start of Iran war<\/p>\n The UK has just had a double dose of good economic news, but growth has also strengthened in the eurozone, where overall business activity reached an eight-month high and services activity a five-month high in July.<\/p>\n S&P Global\u2019s headline composite PMI index – a monthly snapshot of the manufacturing and services sectors \u2013 crossed into expansion territory last month, rising from the neutral mark of 50.0 in June to 52.0. This signals growth of business activity for the first time since March.<\/p>\n The services activity index climbed to 51.7, from 49.4 in June, also indicating expansion while there was also an uplift in factory production.<\/p>\n Germany posted its first rise in private sector output since March, while both Italy and Spain saw stronger rates of growth. Spain stood out in particular, recording its best upturn in just over a year-and-a-half. France bucked the trend with its continued, but slower, contraction in activity.<\/p>\n Chris Williamson, chief business economist at S&P Global Market Intelligence, said the surveys point to quarterly GDP growth of 0.3%, reflecting a broad-based upturn.<\/p>\n double quotation markJuly\u2019s final PMI adds to a picture of encouraging resilience of the eurozone economy amid the ongoing conflict in the Middle East, but also underscores how the business climate is being steered by the changing geopolitical landscape.<\/p>\n July saw the first significant increase in service sector activity since the outbreak of the war, adding to the sunnier summer picture from manufacturing, which has reported the largest increase in production for over four years.<\/p>\n Business optimism also brightened in July, rising to its highest level since January. Sentiment has been lifted by a combination of improving demand conditions, with new orders rising in July at the fastest rate since November, and the slowest growth of firms\u2019 costs since February.<\/p>\n Williamson added:<\/p>\n double quotation markHowever, these improvements came on the tailwind of June\u2019s lower oil prices and easing tensions in the Middle East. With the conflict having since flared up again, we are seeing renewed downside risks to growth and upside risks to already-elevated inflation. The latter puts policymakers in more hawkish decision-making stance, though the marked drop in the PMI price gauges potentially provides a window for further rate hikes to be delayed until the outlook for inflation becomes clearer.<\/p>\n Share<\/a>SpaceX rocket thought to have crashed into the moon in unintentional collision<\/p>\n In other (bad) news for SpaceX, a four-tonne piece of a discarded SpaceX<\/a> rocket that has been floating in space since last year is believed to have unintentionally crashed into the moon at high speed, in a collision that poses no danger to Earth but was expected to blast out a new lunar crater.<\/p>\n The object, the size of a building, is part of the SpaceX Falcon 9 rocket that had launched a lunar lander from the US company Firefly Aerospace toward the moon in January 2025.<\/p>\n The rocket body \u2060was due to hit the moon about 6.35am BST<\/a>, crashing into its surface at 5,400mph (8,690 km\/h). The impact was predicted to kick up a miles-long plume of lunar dust that, while illuminated by sunlight, would be difficult \u2060to spot with the naked eye from Earth.<\/p>\n Professional and amateur astronomers using high-quality telescopes and cameras were not able to immediately confirm the impact on Wednesday, possibly due to the impact site being close to the visible edges of the moon.<\/p>\n Nasa has said the impact was expected to create a crater about 60ft (18 metres) wide and 12ft (four metres) deep and throw dust and rock outward as ejecta.<\/p>\n Share<\/a>British new car sales rise 12% driven by EVs<\/p>\n It\u2019s a double dose of good news, as industry data showed new car sales in Britain rose nearly 12% in July, driven by strong demand for electric vehicles.<\/p>\n Britain\u2019s new car market grew 11.7% year on year with 156,571 vehicles registered, according to the Society of Motor Manufacturers and Traders (SMMT).<\/p>\n While the annual comparison was boosted by a relatively weak July last year, the performance marks an eighth consecutive month of growth, as the market continues to recover from the pandemic slump, back towards pre-Covid levels.<\/p>\n Demand grew across all sectors, with private buyer uptake rising 12.6%, fleet deliveries up 9.5% \u2013 representing six in 10 registrations \u2013 and the lower-volume business segment up 61.3%.<\/p>\n Growth was driven by electric cars, with plug-in hybrids up 33.6% to take a 14.9% share of the market, and hybrids up 11.6% to account for 13.2%.<\/p>\n Battery electric cars (BEVs) achieved another record volume for the month, up 44.5% \u2013 compared with a sub-par July 2025 when some buyers delayed switching until confirmation of full model eligibility for the electric car grant \u2013 to claim a 27.5% share of the market.<\/p>\n The SMMT now expects BEVs to reach 27.4% of a 2.18m-strong new car market by the end of the year \u2013 up from a 26.8% share in its April outlook, but still far short of the 33% mandate target.<\/p>\n Volvo Cars’ upcoming flagship car, the mid-sized Volvo electric SUV EX60, roll off the assembly line in Gothenburg, Sweden, 22 April. Photograph: Marie Mannes\/Reuters<\/p>\n Longer term, BEV share is expected to rise to 32.1% in 2027 against a target of 38%. This is despite an ever-expanding number of brands and models, manufacturer subsidies, government incentives and an ongoing backdrop of high fuel prices.<\/p>\n The industry group said while mandate flexibilities are helping bridge some of the gap between natural demand and ambition, they do not come without cost and their value will diminish as targets accelerate. It pointed to significant discounting, marketing and other fiscal support from industry and government \u2013 costs which are causing manufacturers to pause or even divert investment, while damaging profitability and costing jobs.<\/p>\n Mike Hawes, the SMMT\u2019s chief executive, said:<\/p>\n double quotation markJuly\u2019s record EV performance is a great achievement, reflecting industry\u2019s huge investment in zero emission mobility. But that progress cannot be sustained if manufacturers continue haemorrhaging billions in EV discounts, distorting demand to avoid even steeper penalties. T<\/p>\n The sector\u2019s commitment to decarbonisation is not in doubt but its ability to remain viable \u2013 and attract investment for an EV future \u2013 is under intense pressure. A sustainable transition will not happen merely by compelling supply when underlying demand is not keeping pace despite year-on-year growth. We need urgent reform of the regulation, else Britain risks undermining its competitiveness and the jobs and livelihoods that depend on this industry.<\/p>\n Share<\/a>UK services sector returns to growth as optimism picks up<\/p>\n NEWSFLASH: Britain\u2019s dominant services sector returned to growth last month (good news for the UK\u2019s new prime minister Andy Burnham).<\/p>\n Business activity rose for the first time in three months, there was a small rebound in new orders and inflationary pressures eased.<\/p>\n The headline index from S&P Global, a monthly survey of purchasing managers at companies, climbed to 52.1 in July, from 48.8 in June \u2014 rising through the 50 mark that separates growth from contraction. Although the highest since April, the latest reading was still below its long-run average (54.2).<\/p>\n New business at service sector companies rose slightly, ending a four-month run of declines. Export orders declined for a fifth month, but at the slowest pace over this period. There were disruptions linked to the Middle East war, and strong competition. Where growth was reported, firms mostly noted an upturn in sales to European clients.<\/p>\n Backlogs of work continued to fall in July, reflecting a sustained lack of pressure on business capacity. This led to another reduction in employment, although the rate of job losses was the least marked since October 2025.<\/p>\n Input price inflation slowed for the third consecutive month to its lowest since February, helped by reduced fuel bills in July.<\/p>\n Tim Moore, economics director at S&P Global Market Intelligence, said:<\/p>\n double quotation markUK service providers moved back into growth mode during July as greater consumer spending and strong demand for technology services helped to boost overall business activity.<\/p>\n Optimism has improved in the services sector. Around 45% of companies expect an upturn in business activity over the year ahead, while only 15% forecast a reduction. This signalled the strongest degree of optimism for five months.<\/p>\n Share<\/a>Brent crude rises 1%; Guardian analysis shows major oil firms make $93bn profits amid Iran war<\/p>\n Oil prices have reversed the earlier dip and are up on the day.<\/p>\n Brent crude is back above $80 a barrel, rising 1% to $80.2 a barrel.<\/p>\n Eight of the biggest oil companies amassed profits of more than $90bn (\u00a367bn) in just three months as the Iran conflict sent energy prices soaring and the emissions-fuelled climate crisis caused deadly heatwaves.<\/p>\n The windfall war profits have reignited calls for oil and gas supermajors such as Saudi Aramco and BP to pay for the environmental damage caused by \u201ccashing in on human misery\u201d and fund a rapid transition to renewable energy.<\/p>\n Guardian analysis found that the eight listed oil producers made almost $93bn (\u00a369bn) in the three months to the end of June \u2013 the first full financial quarter after the US-Israeli war on Iran triggered a surge in global oil prices to highs above $126 a barrel<\/a>.<\/p>\n Share<\/a><\/p>\n Updated at\u00a004.25 EDT<\/p>\n Palantir paid just \u00a32m corporation tax in UK in 2024 despite lucrative public sector contracts<\/p>\n Palantir Technologies shares rocketed 29.5% on Tuesday, its second-best day ever, after the AI company reported \u201cotherworldly\u201d quarterly results, according to its co-founder and chief executive Alex Karp. It forecast worldwide revenues would almost double this year to $8bn (\u00a35.95bn).<\/p>\n \u201cForget consensus,\u201d Karp told CNBC<\/a>. \u201cTo my knowledge, no businesses at our scale has even grown half this much.\u201d<\/p>\n However, the American software group paid just \u00a32m in corporation tax in the UK in 2024, despite holding public sector contracts worth hundreds of millions, thanks to tax breaks that are likely to reduce its contributions to governments around the world for years to come.<\/p>\n Palantir. Composite: Artwork by Alex Mellon and Guardian Design. Source Photographs by Getty Images<\/p>\n Palantir<\/a>, which has harnessed AI to secure lucrative work for the NHS<\/a> and the Ministry of Defence, is growing exponentially.<\/p>\n But the amount of tax Palantir pays compared to profits earned \u2013 its effective tax rate \u2013 is just 1.4% globally, according to a report published on Wednesday by the Centre for International Corporate Tax Accountability and Research (Cictar<\/a>).<\/p>\n Share<\/a><\/p>\n Updated at\u00a004.02 EDT<\/p>\n John Oh, \u200can energy economist at Commonwealth Bank in Australia, said ship tracking numbers suggest oil flows through the strait of Hormuz have held up better than first thought, reaching an estimated 40% to 45% of pre-war levels last week.<\/p>\n double quotation markWe estimate that traffic flows only need to return to 50% to \u200b60% of pre-war levels to assert oversupply conditions in global oil markets.<\/p>\n This helps explain why Brent oil futures are so quick to move into the $70s as markets are justified to price in oversupply worries when there are hopes that the strait will be officially re-opened.<\/p>\n Share<\/a>European shares open higher<\/p>\n European shares have opened higher, joining in the Asian and Wall Street rally.<\/p>\n The UK\u2019s FTSE 100 index climbed 42 points, or 0.4%, in early trading to 10,921.<\/p>\n Germany\u2019s Dax and Italy\u2019s FTSE MiB have both added about 0.6% while France\u2019s CAC edged 0.1% higher and Spain\u2019s Ibex gained 0.5%.<\/p>\n Following an earlier dip, oil prices are up now, but Brent crude remains below $80 a barrel, just. It is trading 0.8% higher at $79.97 a barrel.<\/p>\n Analysts at Deutsche Bank explained the mood of cautious optimism:<\/p>\n double quotation markAxios reported last night that the US is hoping for a Wednesday announcement of an interim deal that would see a temporary 60-day arrangement between Iran and Oman under which Gulf-bound vessels would pass through Iranian waters, whilst vessels leaving the Gulf would be able to travel through Omani waters with no fees being charged during the 60-day period. Similar details were reported earlier by the Wall Street Journal, though both reports leave unclear whether a long-term arrangement between Iran and Oman might then involve charging a toll for using the Strait.<\/p>\n Markets have seen plenty of false dawns throughout this conflict, so plenty of attention will be on whether a deal is announced imminently and its details. As of now, investors are increasingly pricing a solution\u2026<\/p>\n The rebound in semiconductors continues to gather pace. After enduring a correction of more than -20% during July, investors appear increasingly willing to re-engage with the AI trade. <\/p>\n Helping sentiment were Palantir\u2019s (+29.45%) strong outlook, reports of Anthropic agreeing a $10bn computing infrastructure deal to meet demand for its models, and Caterpillar (+5.60%) raising sales guidance whilst pushing back on concerns that data-centre demand is slowing. Together, that helped rebuild investor confidence in the broader AI capex cycle after July\u2019s turbulence.<\/p>\n Share<\/a><\/p>\n The next test \u200cfor SpaceX shares comes on Thursday, when up to 912m shares held by employees and other pre-IPO stakeholders become eligible for sale.<\/p>\n James Bull, technology industry senior analyst at RSM UK, said:<\/p>\n double quotation markSpaceX\u2019s first results as a public company are more encouraging than many investors expected. Revenue of $7.8bn was 15% ahead of forecasts and nearly double the same period last year, losses narrowed and the AI division delivered stronger commercial progress than anticipated.<\/p>\n However, the broader investment case remains largely unchanged from the company\u2019s IPO in June. Starlink continues to be the group\u2019s established revenue and profit engine, but the loss-making AI division is where the long-term bet sits. The AI business generated $2.6bn in Q2, but is still running at an operating loss of $1.3bn.<\/p>\n While these results provide evidence of commercial traction, the more important test will be in the next quarter. The business is still investing heavily, with capital expenditure of more than $18bn in the quarter, a significant proportion of which related to AI infrastructure, which requires significant future revenue growth to justify.<\/p>\n SpaceX says that, as recently announced compute agreements with customers including Google and Anthropic go live, the AI division could reach an annualised revenue run rate of $100bn by December, compared with $3.2bn revenue in 2025. The next set of results should provide the first insight of how quickly these agreements are translating into reported revenue.<\/p>\n Share<\/a><\/p>\n Updated at\u00a003.42 EDT<\/p>\n For the first time since SpaceX<\/a> went public, the world got a first-hand look into the trillion-dollar corporation\u2019s financials on Tuesday. The Elon Musk<\/a>-run business reported its second-quarter earnings, saying that its revenue jumped 92% since June.<\/p>\n SpaceX beat Wall Street expectations, reporting $7.81bn in revenue, versus analysts\u2019 predictions of $6.93bn. While expansive, the company is not profitable. The company reported a loss of $541m, down from a $1bn loss in the same quarter last year.<\/p>\n During a call with investors, Musk called it \u201canother milestone year\u201d for the company. \u201cThe SpaceX team is solving some of the hardest engineering problems in the history of humanity,\u201d he said.<\/p>\n SpaceX had a blockbuster initial public offering<\/a> in June with the largest stock market debut in history. The IPO transformed SpaceX into a $2tn company and briefly crowned Musk the world\u2019s first trillionaire. But since then, the company\u2019s stock has plummeted by 24%, erasing nearly $500bn in market cap.<\/p>\n However, the shares still tanked as investors worried over its high capital spending.<\/p>\n Sam North, market analyst for the trading platform eToro, has looked at the results in detail:<\/p>\n double quotation markSpaceX has delivered the kind of debut quarter needed to support a $1.75 trillion valuation. Revenue surged 92% to $7.8bn, comfortably ahead of expectations, while adjusted EBITDA of $3.5bn was roughly 70% above forecasts. The most encouraging feature is the breadth of the beat. Connectivity produced $4.29bn, AI contributed $2.56bn and the space business generated $962m. With $100bn of cash and $47.5bn of backlog, SpaceX has the financial firepower to fund ambitions that would overwhelm almost any other company.<\/p>\n But the results do not remove the central risk, they raise the stakes. SpaceX still lost $541m, Starlink\u2019s falling revenue per user shows the cost of chasing global scale, and AI and Starship will continue consuming enormous amounts of capital.<\/p>\n The Nvidia-backed Starmind project makes the orbital-compute vision more credible, but investors still need proof that it can become a profitable business rather than an expensive engineering experiment.<\/p>\n This quarter buys Musk credibility and time, but with the lock-up expiry approaching and the shares already below their IPO level, SpaceX will need to keep producing exceptional numbers to prevent its valuation from returning to Earth.<\/p>\n![\"Phillip](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/08\/Philip_Inman.png\")
Phillip Inman<\/p>\n