SpaceX shares tumble over 12% after quarterly results, then rebound

SpaceX experienced a significant market correction, with its shares plummeting more than 12% on the Nasdaq following the release of its inaugural quarterly earnings report. The dramatic drop erased approximately $200 billion from its market capitalization, according to AFP.

The company, which recently completed the largest initial public offering in history, reported that its capital expenditures multiplied six times, reaching $18.4 billion. This figure significantly surpassed analyst forecasts, with the majority of the investment directed toward developing infrastructure for artificial intelligence.

The sharp decline saw SpaceX's stock price fall below the $135 mark set during its June IPO. However, the stock showed signs of recovery later in the day, rebounding by 2% and trading around $110. Earlier in the week, shares had closed just above $125, far from the post-debut peak exceeding $200.

The market's reaction underscores growing investor caution regarding the massive investments major tech companies are making in the race for AI leadership, even at the cost of substantially increased capital spending. Nevertheless, the subsequent rebound suggests underlying confidence, potentially fueled by SpaceX's robust second-quarter financial results, which reported impressive revenues of $7.81 billion, exceeding estimates and showing notable growth in its AI and connectivity sectors.