SpaceX Lost $4.28 Billion on $4.7 Billion in Revenue Last Quarter. Here's What's Going On.

After its blockbuster IPO, SpaceX (NASDAQ: SPCX) is now one of the largest money-losing businesses the world has ever seen.

According to SpaceX's IPO prospectus, the company lost $4.94 billion on $18.7 billion in revenue. Data for the first quarter of 2026 suggests that losses are accelerating. So far in 2026, the company has lost $4.28 billion on $4.7 billion in revenue. Scaled up to an entire year, the company is on track to lose around $17 billion on roughly $19 billion in sales.

Net losses, it seems, are accelerating even faster than revenue growth. Keep in mind, however, that the company did eke out a $756 million profit in 2024 off $14 billion in sales.

Why are expenses outpacing sales? One key culprit is to blame.

This is why SpaceX is losing billions of dollars

Morgan Stanley analysts predict SpaceX will generate $3.4 trillion in revenue by 2040. Goldman Sachs, meanwhile, sees SpaceX's revenue surpassing $300 ​billion by 2030.

Note that both firms were underwriters for SpaceX's IPO and thus may have internal incentives to sell the promise of SpaceX's growth potential. But understanding where all of this growth is expected to stem from reveals why SpaceX is currently posting large and growing net losses.

Image source: Getty Images

Diving into SpaceX's IPO prospectus, investors should quickly realize that the company is not primarily a rocket stock or a satellite stock, even though both of those categories are critical to its long-term growth potential. In reality, SpaceX is a bona fide AI stock.

"We believe we have identified the largest actionable total addressable market in human history," the company claims. "We estimate that our quantifiable TAM is $28.5 trillion." Less than 10% of that total opportunity, however, deals with Starlink internet satellites or rocket development. Nearly all of it deals with a single opportunity: AI.

The growth potential of AI is why SpaceX is spending so heavily on growing that segment, even though it generated just $3.2 billion in revenue last year.

Spending for SpaceX's AI segment is extreme. The company acquired Anysphere, for example -- the start-up behind Cursor, an AI coding assistant -- in a $60 billion deal. And first-quarter capital expenditures this year reached $10.1 billion, with AI accounting for $7.7 billion of that sum.

This pace of spending isn't expected to abate anytime soon.

"Developing, training, and providing inference for frontier AI models requires substantial and growing capital expenditures, including investments in specialized computing hardware, data center infrastructure, energy procurement, and technical personnel, and we expect these costs to continue to increase for the foreseeable future," SpaceX's IPO prospectus admits. "In addition, we plan to allocate substantial capital to build our AI compute infrastructure, and we expect a multiyear investment horizon before these deployments translate into sustained positive AI segment adjusted EBITDA."

To be clear, SpaceX's Connectivity segment -- which includes its Starlink internet service -- appears to generate impressive positive gross margins with equally impressive top-line growth. Its rocket division, meanwhile, is arguably the most advanced the world has ever seen, with a key role in enabling other long-term growth opportunities such as orbital data centers and a human colony on the moon.

But make no mistake: SpaceX's future will hinge on the success or failure of its AI division. It's this division that is responsible for SpaceX's mounting losses, even though those losses are largely a result of heavy investment designed to scale that segment as fast as possible.

Market conditions, therefore, will prove key to SpaceX's future. The company will need to return to capital markets again and again to raise fresh funds to support its growth build-out and plug its financial losses. Growth may occur as expected should markets remain strong. But if capital grows scarce, the entire SpaceX story grows far more uncertain.

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.