SpaceX Rides Out Its $100 Billion Lock-Up Storm as AI Spending Debate Rages On

SpaceX shares rise 6% despite $100B lock-up release, as strong Q2 revenue offsets AI spending concerns.

The moment Wall Street had been bracing for arrived on Thursday, and SpaceX shareholders barely flinched. With roughly 911.5 million shares — worth around $100 billion — suddenly freed from insider lock-up restrictions, the stock climbed 6.14 percent on the Nasdaq to $114.92, and gained 6.55 percent in German trading to €99.55. The episode marked a striking reversal of fortune for a company that, just a day earlier, had seen its shares rattled by the scale of its artificial intelligence ambitions.

A First Earnings Report That Cut Both Ways

The turbulence began with SpaceX's inaugural quarterly report as a public company, released on Tuesday. The headline numbers were undeniably strong: second-quarter revenue surged 92 percent year over year to $7.814 billion, comfortably ahead of the roughly $6.9 billion analysts had penciled in. The net loss narrowed from more than $1 billion to $541 million, while adjusted EBITDA climbed 191 percent to $3.538 billion.

Yet investors zeroed in on the cost of growth. Capital expenditures hit $18.369 billion in the quarter, with $15.828 billion earmarked for AI infrastructure alone — well above the $13.09 billion analysts had projected. Free cash flow swung to negative $15.95 billion for the quarter, bringing the first-half deficit to $28 billion. The market's initial response was a drop of roughly 7 percent in US trading, a move that some observers attributed less to the earnings themselves than to the sheer magnitude of the capital outlays required to sustain the company's trajectory.

The AI segment, which bundles cloud services, Grok, and X subscriptions, grew 247 percent to $2.56 billion in revenue but still operates at a $1.26 billion operating loss. Meanwhile, the Starlink connectivity business doubled its subscriber base to 12 million over the past year, adding 1.7 million customers in the quarter alone — its strongest quarterly growth to date. Average revenue per user slipped from $85 to $66 monthly, a decline largely attributed to international expansion.

The Lock-Up Test That Wasn't

Thursday's share release represented the first tranche of insider holdings to become tradable, with up to 20 percent of restricted positions unlocked. The free float had previously amounted to only about 5 percent of total shares, and the prospect of a supply glut had many market participants bracing for a sell-off. Instead, trading volume of over 250 million shares absorbed the supply without incident, and the stock advanced.

Short interest stood at 36 percent of the free float at the time, a level that likely fueled a short-covering rally as bears scrambled to close positions. Technical indicators suggested a market finding its footing: the relative strength index sat at a neutral 41.9, while 30-day volatility remained elevated at roughly 79 percent, underscoring that large swings remain the norm.

The lock-up calendar, however, is far from complete. Another 40 percent of shares are slated to become tradable on December 8, with the largest tranche — 6.4 billion shares held by Elon Musk — scheduled for release in June 2027. Even after Thursday's expansion, the free float remains modest relative to a market capitalization of approximately €1,431.34 billion.

Wall Street's Valuation Standoff

The analyst community has yet to converge on a consensus view of SpaceX's worth. JPMorgan raised its price target from $225 to $240 with an Overweight rating, citing stronger revenue assumptions in the AI business. Bernstein followed suit, lifting its target from $239 to $248 with an Outperform rating, pointing to improved pricing in the compute segment. On the other side of the ledger, Wells Fargo trimmed its target to $215, while Piper Sandler cut its price objective from $156 to $140 with an Underweight stance — a move the firm explicitly tied to the upcoming share unlocks and heavy investment spending rather than fundamental deterioration.

The average analyst target sits near $223, but individual estimates range from $62 to $800, an unusually wide dispersion that speaks to the uncertainty surrounding the AI division's path to profitability.

Musk's Accelerated Ambitions

On the company's first earnings call as a listed entity, Musk pulled forward his trillion-dollar revenue target from 2031 to 2030. Achieving that would require roughly 78 percent annual growth over four years, building from an estimated run rate of $100 billion by the end of 2026. Management also reaffirmed its goal of reaching a $100 billion annualized recurring revenue rate by year-end, a statement that lent additional support to Thursday's rebound.

Two catalysts loom on the horizon. The 14th test flight of Starship is targeted for August, pending regulatory approval, with plans to deploy first-generation Starlink V3 satellites and attempt a landing of the upper stage, followed by a booster catch at the launch tower toward the end of the month. Separately, SpaceX and Nvidia announced a collaboration to place Nvidia's Rubin and Vera-generation chips into orbit aboard a satellite payload dubbed Starmind AI1, extending the AI infrastructure race beyond terrestrial data centers. The company also unveiled plans, jointly with Tesla, to build a chip fabrication facility called "Terafab" in Grimes County, Texas, with an initial investment of $16.8 billion.

For investors, the central question remains whether the explosive growth in AI can eventually justify the massive upfront spending — a debate that is likely to intensify as the next wave of share unlocks approaches in December.