reported its first quarterly earnings<\/a> as a publicly listed company.<\/p>\nOn Wednesday, the stock closed down at $108.10, down 13.6 percent from Tuesday\u2019s close of $125.33.<\/p>\n
Recommended Stories list of 4 itemsend of list<\/p>\n
Investors have been spooked by the increase in the company\u2019s capital expenditure. At $18.37bn, it was a six-fold jump from last year, and much higher than the $13.2bn that analysts had forecast.<\/p>\n
The majority of that investment, $15.8bn, is earmarked for artificial intelligence (AI) infrastructure, which includes specialised compute, storage, networking and software systems required to build, train, deploy and operate AI models at scale. SpaceX has said it wants to increase the capacity of its data centres from 1.4GW currently to 2GW by year-end.<\/p>\n
Investors across the technology sector are questioning whether the large investments in AI infrastructure will actually yield returns.<\/p>\n
\u201cWe\u2019ve watched the same scrutiny land on Big Tech this earnings season, where investors have questioned open-ended wallets and started demanding a visible return on them,\u201d said Josh Gilbert, lead analyst at trading platform eToro.<\/p>\n
\u201cSpaceX\u00a0faces that test with an added degree of difficulty because it\u2019s asking shareholders to bankroll data centres in orbit.\u201d<\/p>\n
SpaceX has said its computing capacity not only serves its Grok models but is also actively sold, with $14.1bn in cloud-services agreements lined up.<\/p>\n
The one area that SpaceX saw some profit was from the \u201cconnectivity\u201d business, with revenue jumping 66 percent from a year earlier as the number of subscribers to its Starlink satellite communications service doubled to 12 million, bringing in $1.66bn in operating income.<\/p>\n
SpaceX\u2019s share price faces another test on Thursday, when the first tranche of the post-IPO lock-up expires, making up to 911.5 million shares, roughly 20 percent of restricted holdings, eligible for sale.<\/p>\n
Melissa Otto, head of Visible Alpha research at S&P Global, told Al Jazeera that the stock is \u201clikely to be volatile\u201d once the lock-up lifts.<\/p>\n
SpaceX\u2019s IPO was priced at $135 per share and climbed to $225 within days of its June 12 debut, briefly catapulting Musk as the world\u2019s first trillionaire<\/a>. The stock has since dropped.<\/p>\n","protected":false},"excerpt":{"rendered":"The stock was down more than 13 percent as investors were spooked by the company\u2019s heavy investments. By…\n","protected":false},"author":2,"featured_media":728848,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[84,2411,1294,995,5297,59,50,86,56,54,158,55,3544],"class_list":["post-728847","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-business-and-economy","tag-economy","tag-elon-musk","tag-financial-markets","tag-gb","tag-news","tag-technology","tag-uk","tag-united-kingdom","tag-united-states","tag-unitedkingdom","tag-us-canada"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/728847","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=728847"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/728847\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/728848"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=728847"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=728847"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=728847"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}