SpaceX Q2 Earnings Preview: Can Elon Musk Reignite the Rally?

SpaceX Earnings Preview: Stock Outlook, AI Growth & Starship

After rallying to an IPO-week high of $225.64, SpaceX has since fallen over 50%, with the stock now sitting just above its all-time low at $112.55. Expectations have been reset, sentiment has deteriorated and positioning has turned increasingly cautious. The question now is whether management can restore confidence in the long-term growth story, or whether investors remain focused on the near-term technical headwinds. 

The market isn't buying earnings, it's buying the future 

Consensus expects another quarter of investment-heavy growth.

(Source: Bloomberg)

Revenue is expected around $6.9 billion, adjusted EBITDA near $2.1 billion and another quarterly loss, as management continues to aggressively invest across AI infrastructure, Starlink and Starship. Free cash flow is expected to remain deeply negative as capex accelerates towards what many believe will represent the peak of the current investment cycle.

Ultimately, very few investors appear focused on whether SpaceX beats revenue estimates by a few hundred million dollars.

Instead, this report is about validating the roadmap.

Five questions investors want answered

Is Starship still on track?

Perhaps the single biggest question is whether management reiterates plans for Starship to begin carrying commercial payloads before year-end.

Every delay pushes back the economics of reusable launch systems and, importantly, the longer-term orbital AI infrastructure opportunity that underpins many bullish valuation models. Both my preview notes and Morgan Stanley identify Starship timelines as one of the key swing factors for the stock.

How quickly is the AI business scaling?

Increasingly, this is becoming an AI stock just as much as it is a space company.

Investors will be looking for evidence that recent compute contracts are translating into durable revenue, updates on deployment towards 2GW of compute, commentary around Grok adoption and whether the Cursor acquisition can accelerate monetisation.

Morgan Stanley notes that many investors currently assign little or even no value to the AI business, largely because of uncertainty around monetisation and the enormous capital required to build the infrastructure. That creates significant upside if management can provide greater clarity.

Has Starlink pricing stabilised?

Starlink remains the cash engine of the business.

Average revenue per user has fallen as SpaceX expands internationally and introduces lower-priced offerings. Investors will be looking for signs that ARPU has stabilised, while subscriber growth and enterprise connectivity remain healthy.

The combination of subscriber growth and improving mix is expected to drive a meaningful uplift in gross margins through the second half of the year.

Can margins continue improving?

Consensus expects gross margin to improve materially from Q1 as higher-margin AI revenue becomes a larger contributor.

Given where the stock trades today, any disappointment here could reinforce concerns that monetisation is taking longer than anticipated.

Has capex peaked?

Management's commentary around capital expenditure may prove more important than the reported number itself.

Consensus expects another substantial quarter of investment, but investors want reassurance that the most capital-intensive phase is nearing completion and that free cash flow improves through the second half.

Technicals are almost as important as fundamentals

Normally, earnings are driven by fundamentals.

SpaceX is different.

Morgan Stanley describes the stock as approaching "Max Q", borrowing the aerospace term for the point of maximum aerodynamic stress during launch. Their argument is that the stock is now facing maximum technical pressure as investors grapple with future lock-up releases and a substantial increase in tradable shares over coming months.

That helps explain why sentiment has become increasingly cautious despite little change to the long-term story.

The stock has retraced more than 50% from its highs, short interest sits among the highest in its peer group, and options are pricing a move of roughly ±14% following earnings. Current options imply a post-result range of approximately $96.60 to $128.50, highlighting just how binary this event could become.

Price levels to watch

Technically, the market remains fragile.

Immediate resistance sits between $118 and $122, followed by $130 and then the $168-$177 region if buyers regain control.

On the downside, $107 remains the critical support level. A decisive break would likely focus attention on the psychological $100 level.

The bottom line

This feels like one of those earnings reports where the conference call matters more than the financial statements.

The Street largely expects another quarter of heavy investment and elevated losses. What investors really want is confidence that Starship remains on schedule, AI monetisation is accelerating, Starlink continues to scale profitably and the current capex cycle is approaching its peak.

After a 50% retracement from the highs, expectations have become considerably more measured. That lowers the hurdle for management, but it also means the market will be looking for tangible evidence that execution is catching up with ambition.

If Elon Musk can convince investors that the next phase of growth remains firmly on track, this could mark the point where sentiment finally begins to turn. If not, the combination of weak positioning, elevated volatility and continued uncertainty around execution could leave SpaceX searching for a new launch pad.

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