SpaceX's first-ever earnings report is a big deal - but not because of the numbers

By William Gavin

Investors will be more focused on Elon Musk's commentary and the potential for added stock volatility

Elon Musk will address SpaceX investors on Tuesday.

When SpaceX reports quarterly earnings for the first time on Tuesday, investors are likely to focus their attention more on comments from CEO Elon Musk than on the financial nitty-gritty.

Put simply: "We believe the quarterly results should not matter," Bernstein analysts led by Douglas Harned said in a client note on Friday. "What will be important is the level of confidence projected by management regarding the company's growth path."

SpaceX (SPCX) has a lot to talk about: progress with the Starship mega-rocket, the availability of semiconductors, and regulation and scarcity of artificial-intelligence resources, to name a few. Updates on its plans, especially if they come from Musk, are what investors really want to hear.

Dean Lyulkin, CEO of Cardiff and a former executive at Fisher Investments, agreed that management's guidance outweighs whether SpaceX beats or misses on earnings. "We've already seen this earnings season that good numbers by themselves aren't always enough," he added.

Apple (AAPL) on Thursday reported mostly solid fiscal third-quarter earnings above expectations, but investors were concerned by downbeat guidance and warnings from management about growing supply constraints and memory costs. Tesla (TSLA) investors were spooked by what one analyst called "muted" commentary on key technologies, as well as commentary from Musk about capital-expenditure plans.

"We should be spending on capex as fast as we can ... without it being too wasteful," he told investors. "It's okay to be a little less capital efficient if we get things done sooner."

SpaceX will also be spending, in part due to joint initiatives with Tesla. Wall Street expects SpaceX to book $13.2 billion in capital expenditures for the June quarter and deliver negative free cash flow of $1.9 billion, according to FactSet. Analysts see full-year capex of almost $46 billion in 2026, followed by $87 billion in 2027.

Investors have been paying attention to capex, as hyperscalers plan to book tens to hundreds of billions of dollars each on artificial intelligence. Last month, Moody's estimated hyperscaler capex to reach $785 billion in 2026 and almost $1 trillion in 2027. That was before Amazon.com (AMZN) and Meta Platforms (META) nudged up their spending forecasts.

Those spending plans have forced some tech giants to take on more debt. In June, SpaceX investor Alphabet (GOOG) (GOOGL) raised $85 billion in debt; Amazon has raised about $92 billion this year, according to Deutsche Bank analysts. SpaceX took on $25 billion worth of debt just a few weeks after raising nearly $86 billion from its initial public offering.

"They're going to be spending cash for the indefinite future. The idea of free cash flow is just not part of the story," Bill Birmingham, managing director at exchange-traded product provider Rex Shares, told MarketWatch.

Birmingham added that SpaceX's earnings will not just be communicating to investors about what happens in the second half of 2026, but "where the right capital raise is and for what price."

A chance to cash out

Another major event lies just a few days after earnings. Regardless of how good or bad SpaceX's results are, up to 911.5 million shares of Class A common stock subject to a 180-day lockup will be automatically released on the second full trading day after the report is published.

A second release, timed for that day, is unlikely because of how badly SpaceX's stock has performed in July. The unlocking of up to 455.8 million Class A shares required that the stock closed at 30% or greater above the company's initial public offering price for at least five of the 10 trading days ending on Aug. 4.

But SpaceX hasn't traded above its $135 IPO price, even on an intraday basis, since July 16. Since its peak closing price on June 16, SpaceX has shed more than $1.2 trillion in market capitalization, according to Dow Jones Market Data.

To limit lockup-related volatility, SpaceX plans to release some insider-held shares for sale across 10 distinct events, with the final date being 180 days after it filed its prospectus. Shares held under an extended lockup won't be eligible for early release until after SpaceX reports fourth-quarter earnings in early 2027.

But the research firm Zephirin on Monday lowered its price target for SpaceX to $190 a share from $310 a share, citing the impact of the lockup schedule. It maintained a "buy high risk" rating on the stock.

"The scale of the potential unlock is likely to create a meaningful technical overhang and increase near-term share price volatility," Zephirin said.

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-William Gavin

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08-03-26 0754ET