SpaceX, now publicly traded under the ticker NASDAQ:SPCX, has released its first financial report as a public company. The results for the second quarter exceeded expectations, with revenue reaching $7.8 billion—a 92% jump from the same period last year. A standout was the AI segment, which saw a remarkable 247% surge in revenue, totaling $2.56 billion.
During the earnings call, SpaceX's CEO, Elon Musk, announced a new partnership with Nvidia, naming the chipmaker as the exclusive AI partner for the company's future space initiatives. Musk praised the Nvidia Vera Rubin architecture, stating, 'We think the [Nvidia] Vera Rubin architecture is the best AI computer.' He also set a tentative target of 20 gigawatts of power and cooling capacity online by the end of 2027, emphasizing SpaceX’s commitment to building its AI computing platform exclusively on NVIDIA’s Vera Rubin architecture.
Key financial improvements
Strong Financial Performance in Q2
The second-quarter report from SpaceX showed marked improvement across all of its business segments. In the connectivity segment, which is heavily tied to the Starlink broadband satellite, revenue soared 66% to $4.29 billion. More impressively, the segment’s operating income climbed 79% to $1.66 billion, reflecting a growing contribution to the company's bottom line.
While still in the red, the space segment reported a revenue increase of 29% to $962 million. The company's overall net loss for the quarter was $541 million, a sharp improvement from the $1 billion loss reported in the prior year. This shows SpaceX is becoming more financially disciplined as it matures.
Nvidia's new role in space computing
Nvidia's Role in Space Computing
Under the new agreement between SpaceX and Nvidia, the AI chipmaker will supply the Vera Rubin NVL723 rack-scale AI supercomputer for use in both space-based and terrestrial operations. Additionally, the two companies are collaborating to design the Starmind AI1 satellite compute payload. Each satellite will be equipped with Nvidia Rubin GPUs and Vera CPUs, designed for high-performance computing in the harsh environment of space.
This exclusive partnership makes Nvidia the sole provider of AI chips for SpaceX's space-based data centers. It's a critical step in SpaceX's broader plan to deploy AI-powered computing systems in orbit, enabling real-time data processing and analysis in space.
For Nvidia, the partnership is a major boon. Despite delivering record first-quarter results, its stock has remained relatively flat this year, posting gains of around 14% and matching the performance of the Nasdaq Composite. The stock is currently trading at a forward earnings multiple of less than 24, considered relatively low compared to its historical averages. With SpaceX's ambitious space ventures, this deal could give Nvidia a strong foothold in the emerging field of space computing.
Stock Volatility and Investor Caution
SpaceX has had a wild ride since its IPO, during which it raised $85.7 billion and saw its market cap peak at $2.1 trillion. However, the stock has since been highly volatile, dropping as much as 46% from its peak. Following the earnings report, the stock initially fell more than 7%, signaling mixed investor sentiment despite the solid results.
The company's financial strides are supported by several key developments. SpaceX has conducted an impressive 78 launches so far this year, successfully placing 1,041 tons of cargo into orbit. Starlink has also doubled its subscriber base to 12 million, with each user contributing an average of $66 in monthly revenue. This growth is underpinned by a fleet of 10,200 satellites providing broadband coverage in 167 countries.
Another driver of performance was the xAI agreement, which generated $14.1 billion in new compute capacity and added $1.6 billion to SpaceX's AI revenue in the second quarter. This demonstrates the increasing importance of AI to the company's operations and long-term strategy.
Investors remain cautious as SpaceX approaches a significant lockup expiration event, which could bring new shares onto the market and potentially impact the stock price. While the financial results are encouraging, the company's future performance will depend on its ability to balance ambitious innovation with consistent financial discipline.
If SpaceX can successfully execute its plans to build a global network of AI data centers in orbit, it could create an entirely new market for high-performance computing in space. For Nvidia, the collaboration represents a strategic move into a high-growth frontier, positioning the chipmaker to benefit from the long-term development of space-based AI infrastructure.