SpaceX Beat Revenue at +92% and Starlink Hit 12M Subs — So Why Is the Stock Consolidating at $133.37?

For SpaceX, revenue was $7.814 billion, a 92% increase, defining the lower boundary of expectations. Connectivity, or Starlink, generated $4.291 billion (66% YoY increase), with 12 million total subscribers, from 6 million subscribers a year prior. 

The company added 1.7 million net subscribers in the quarter, a record. Enterprise and government connectivity service revenue grew to $1.8 billion, supported by Starshield contracts exceeding $6 billion in multi-year commitments. AI infrastructure doubled to $2.561 billion (247% increase YoY) with an adjusting EBITDA of approximately $1.15 billion, proving that the capex spending is profitably yielding returns.

Adjusted EBITDA increased 191% to $3.54 billion. Free cash flow was positive $1.22 billion with a 63% margin. Post-IPO, cash grew to around $100 billion. Management expects to achieve 2 GW of nameplate compute capacity by the end of 2026. Within this quarter, the company closed $14.1 billion of new cloud service contracts and $6.7 billion of these contracts in early Q3.

Announced on August 6, the $16.8 billion SpaceX and Tesla joint venture, Terafab, will construct a semiconductor manufacturing plant in Grimes County, Texas. The plan is massive, spanning 100 million square feet. Terafab will integrate all components of making semiconductors, from logic to memory to packaging and testing, to provide chips for Tesla's Optimus robots and Cybercabs and even for SpaceX's proposed Starlink Data Centers. This demonstrates that Musk's vision for vertical integration of complete AI infrastructure has progressed from idea to actual investment.

Argus Research's upgrade of SpaceX to Buy, coupled with a new $160 price target, was released on August 7, as the much anticipated first major post-IPO lockup expiration on August 6 occurred without the expected sharp insider selling. Of the 911.5 million shares that were now available for sale, stock trading was not as expected with a 6% stock price increase. Rather than a typical crash, Morgan Stanley considered Adam Jonas's analysis an excellent opportunity to buy with no selling signal.

SpaceX has confirmed a breakout above the descending channel on the 4-hour chart that has controlled the price action since June. After recovering from the $105-$110 range, price broke above various resistance levels. The stock is currently consolidating at $133.37 and has taken out the $130.63 pivot and is currently sitting above the short-term moving average of $130.32. The descending channel has flipped to become support, as the previous channel resistance is below current price, providing an uplifting view on the reversal structure.

Momentum is currently bullish. The RSI is at 59 and is well underneath the overbought region, and thus provides ample opportunity for price to continue to run while buyers defend the $130.63 level. The near term resistance level is $143.37. A 4-hour candle closing above this level would turn it into a higher high, and would likely continue the recovery towards the levels of $153.68 and $164.62.

SPCX Price Chart - Source: Tradingview

On the contrary, price breaking below the $130.63 pivot would result in a loss of the breakout and have price dropping towards the $117.42 support level. Below that is the major support zone of $105.75, above which price can begin to resume the larger bearish trend.

Key Levels (Aug 12)

• Immediate resistance:  $143.37 (key confirmation level)
• Extended targets:  $153.68, $164.62 (if breakout extends)
• Critical support:  $130.63 (pivot, must hold)
• Short-term EMA:  $130.32 (just below price)
• Secondary support:  $117.42
• Major floor:  $105.75, $98.39
• Current price:  $133.37 (above pivot)
• RSI:  59 (neutral, room to run)

There are three reasons. The first reason is that profit taking is expected after a 30%+ rally from IPO price and a $105-$133 move in two weeks. The second reason is uncertainty surrounding Starship Flight 13 (completed in July with a soft splashdown, but with no clear estimated time of launch for the next scheduled test) has caused some market participants to be a bit more risk averse. The third reason is that the $18.4 billion spent in cape ex in the last quarter was justified by positive FCFF, but still presents the question of how likely it is that the company maintains a high level of capital expenditure.

The Starlink growth trend continued with another one million new subscribers during this quarter, and we post initial earnings results from SpaceX (SPCX). Additionally, the company made the announcement of the first generation of the Starship constructions (Terafab), as well as the Argus upgrade. We noted smooth execution for the post-IPO lockup.

Technically, SPCX traded above the descending channel, and is consolidating above $130.63 with $143.37 as the next key resistance. The RSI at 59 means price has room to move higher. If $143.37 holds, price will likely consolidate relatively sideways. If price breaks below $130.63, price will likely fall towards $117.42.

For the shorter-term orientation (i.e. in the next week), price will likely continue it’s bullish trend if price holds above $130.63. A break of $143.37 will likely push price to trade in the range of $153 to $164. For longer-term holders, pullbacks to the $125 to $130 would be good entry opportunities. The fundamental value is still largely in-tact due to the rapid growth in Starlink, profitability in SpaceX AI services, and the vertical integration of terafab. Analysis presented herein is for informational purposes only and should not be construed as an endorsement or recommendation to buy, sell or hold securities.