SpaceX's $17 Billion AI Bet Fuels Record Losses as Cathie Wood Doubles Down on the Dip

SpaceX shares fell below IPO price for the first time, losing over a third of value. Massive AI spending drives $4.28B Q1 loss, while ARK Invest accumulates $27B stake.

SpaceX shares slumped to an all-time low of $147.11 on July 8, closing below its initial public offering price for the first time since listing. The stock has now shed more than a third of its value from the June 16 peak of $225.64, a slide that has accelerated even as some of Wall Street's most aggressive buyers wade in.

Cathie Wood’s ARK Invest has been scooping up shares during the downturn, accumulating roughly $27 billion worth of SpaceX equity. The position now ranks as the fourth-largest holding in the firm’s flagship fund, representing 4.5% of total assets. Wood’s conviction runs counter to the broader market mood, where concerns over the company’s mounting cash burn are rattling retail and institutional investors alike.

Losses Mount Faster Than Revenue

The numbers driving the pessimism are stark. SpaceX posted a net loss of $4.28 billion in the first quarter of 2026 on revenue of just $4.7 billion. Annualized, that loss trajectory points to roughly $17 billion in red ink for the full year, against around $19 billion in sales. The deterioration marks a sharp reversal from 2024, when the company generated a profit of $756 million on $14 billion of revenue. In 2025, losses had already expanded to $4.94 billion, even as sales grew to $18.7 billion.

Rolling together 2025 and the first quarter of 2026, SpaceX has lost approximately $9.4 billion on cumulative revenue of $19.3 billion – a margin profile that underscores how costs are galloping far ahead of the top line.

The AI Pivot Driving the Cash Furnace

SpaceX’s own IPO prospectus leaves little doubt about where the money is going. The company describes itself not primarily as a rocket or satellite firm, but as an artificial intelligence enterprise, pegging its total addressable market at $28.5 trillion – a prize management calls “the greatest opportunity in human history.” That vision comes with a staggeringly expensive price tag.

Last year, SpaceX paid $60 billion to acquire Anysphere, the startup behind the AI coding assistant Cursor. The AI segment contributed just $3.2 billion in revenue over the same period. Capital expenditures in the first quarter alone hit $10.1 billion, with $7.7 billion of that flowing into AI-related infrastructure, including orbital data centers and model-training clusters. Management has openly warned that training and operating costs for AI models will continue to rise for the foreseeable future.

Starlink and Rockets Still Humming – But Not Enough

Not every business line is hemorrhaging cash. Starlink’s connectivity segment continues to post solid gross margins and strong subscriber growth. The number of Starlink users jumped 105% year-over-year to 10.3 million, while the cost of manufacturing each terminal has fallen 59% since 2022. Average revenue per user, however, slid from $86 to $66 per month, a familiar pressure point for satellite broadband operators.

The launch and rocket division remains technologically dominant, with SpaceX’s reusable rockets giving it a decisive cost advantage over rivals. Yet neither segment generates enough surplus to offset the AI-fueled spending spree. The company’s future hinges on whether the AI wager eventually pays off – a bet that could take years to resolve.

Analyst Opinion Splits Into Two Camps

Wall Street is starkly divided on the stock. Raymond James has slapped a $800 price target on SpaceX, arguing that the Starship infrastructure will unlock a multi-trillion-dollar market by 2031, pushing the company’s market capitalization to $10 trillion. At the other extreme, MoffettNathanson values the equity at $131, while CFRA issued a sell rating with a $115 target, citing the company’s voracious capital needs.

The bull case leans heavily on the idea that SpaceX is still in the early innings of a technological revolution. The bear case fixates on the simple arithmetic of a business that is spending $10 billion a quarter while generating less than $5 billion in quarterly sales.

Competition and Capital Markets Complicate the Outlook

Blue Origin is adding to the pressure. Jeff Bezos’s space venture is seeking $10 billion in fresh funding at a $130 billion valuation, with Bezos personally contributing $2 billion. Morgan Stanley estimates that SpaceX itself will need $84 billion annually from 2027 onward just to finance its satellite network expansion, which envisions launching up to 100,000 new spacecraft.

The next major catalyst arrives in early August, when SpaceX will report its first quarterly results as a publicly traded company. Investors expect clarity on whether AI-related losses have stabilized or are still widening. With the stock already trading at a discount to the IPO price and insider lock-up periods beginning to expire, the risk of additional selling pressure is very real. The broader market’s appetite for cash-hungry growth stories will determine whether the AI thesis can survive these numbers intact.