It could have been worse -- a lot worse.
When Space Exploration Technologies (SPCX +4.45%) reported Q2 results earlier this month -- its first earnings report as a publicly traded company -- this triggered the first unlocking of SpaceX's shares after its June initial public offering (IPO), letting insiders sell as much as 20% of their SpaceX stock. Pundits predicted a wave of selling to hit SpaceX when that happened. (It didn't, but it still might. A further 7% of insider shares will unlock on the 70th day after the IPO -- Aug. 21).
SpaceX stock fell after earnings -- down 13.6%. But it bounced right back the next day and has continued to climb in fits and starts and is approaching $150 (as of Aug. 17)
The question is: Should investors have bought SpaceX stock after earnings?
Image source: The Motley Fool.
SpaceX Q2 earnings: by the numbers
By some measures, SpaceX had a blowout Q2. Quarterly sales rose 92% from a year earlier to $7.8 billion across the company's three big business divisions, and crushed analyst predictions of $6.8 billion. SpaceX didn't earn a profit, but the $0.09 per-share loss it reported was much better than the $0.29-per-share loss analysts expected.
When you zoom in to examine SpaceX's business unit, by unit, however -- that's where the problems start to become visible.
SpaceX Starlink
Take Connectivity, for example. The business, better known as Starlink, expanded its satellite constellation past 10,000 units and doubled its subscriber count to 12 million. Revenue didn't double, however, growing only 66%, as most of Starlink's growth these days comes from foreign jurisdictions where SpaceX charges lower subscription fees.
The good news is that, with its costs largely fixed, even adding customers at discounted rates increased profit incrementally, so Connectivity's operating profit grew 79%. But do keep an eye on that subscriber growth/revenue growth divide. It bears watching.
SpaceX launch
Or consider the space launch business that gave SpaceX its name. SpaceX put more than 1,000 tons of cargo into orbit in the first half of 2026, launching 78 times in six months, yet revenue in the business rose only 29% year over year, the slowest growth of the company's three divisions. And despite getting bigger, Space didn't get better -- not from a profit perspective at least. Instead, losses in the Space division grew even faster than revenue, up 47% to $542 million.
SpaceX AI
Last and least, we come to artificial intelligence (AI), the division comprising Grok and the X social media service, both of which SpaceX added to its corporate structure at the last minute, just ahead of the IPO. Elon Musk has boasted that his AI division will one day be nearly as big as the entire U.S. economy, with a total addressable market of $26.5 trillion -- and it's certainly off to a great start.
SpaceX AI set a blistering pace in Q2, with revenue growing 247% year over year to $2.6 billion. The division also pared its losses slightly. Still, AI lost $1.3 billion in the quarter.
AI is also the most likely culprit for SpaceX burning through $16 billion cash, resulting in negative free cash flow in Q2, according to data from S&P Global Market Intelligence. Added to the $9 billion SpaceX burned in Q1, that makes $25 billion burnt in just the first half of 2026 -- with six more months to go.
NASDAQ: SPCX
Key Data Points
Why I (still) won't invest in SpaceX stock
AI is, in fact, the entire reason that SpaceX is losing money.
Consider: Before adding Grok and X to the fold, SpaceX ran a pretty simple business. SpaceX launched rockets that put satellites into orbit. Its Starlink subsidiary operated most of those satellites to provide internet services to the world.
In Q2, if those two businesses had been all SpaceX owned, the company would have been profitable. The space division might have lost $542 million, but Starlink would have more than made up the difference with nearly $1.7 billion in operating profit. Combined, the two businesses would have been profitable, with $1.1 billion in pretax earnings.
AI's $1.3 billion loss erased that profit, resulting in a net loss for SpaceX last quarter.
Two months ago, I explained that Musk's money-losing gamble on AI was the single reason I was no longer interested in owning SpaceX stock. Two months later, SpaceX just reminded me that -- thanks to AI -- there's still no good reason to own stock in an unprofitable SpaceX.
