Stock Market Today, Aug. 5: SpaceX Beats Revenue but Faces Capital Spending Pressure

Space Exploration Technologies (NASDAQ:SPCX), a reusable rockets, spacecraft, and satellite broadband services provider, closed at $108.27, down 13.61%. Earnings results showed a revenue beat, but investors focused on rising capital spending and widening losses.
Trading volume reached 201.2 million shares, coming in about 72% above its three-month average of 117.2 million shares. SpaceX IPO'd in June and has fallen 33% since going public.

How the markets moved today

The S&P 500 (SNPINDEX:^GSPC) closed at 7,724, down 0.17%, while the Nasdaq Composite (NASDAQINDEX:^IXIC) finished at 26,363, down 0.83%. Among satellite communications and launch services companies, Rocket Lab (NASDAQ:RKLB) closed at $74.82, up 0.46%, while AST SpaceMobile (NASDAQ:ASTS) closed at $68.38, down 2.74%. Those moves highlight that investors see potential for multiple winners among rocket launch service providers, but believe SpaceX’s Starlink might be the sole winner in satellite broadband.

What this means for investors

Key takeaways from SpaceX’s first public earnings report included a focus on revenue strength, as well as higher capital spending and free cash flow pressure. Investors punished the stock due to concerns that the more than $18 billion in capital spending during the quarter would not slow down anytime soon.

Long-term investors should welcome it, though, as long as accelerating revenue growth continues. SpaceX has multiple potential profit channels with its rocket launch service, artificial intelligence (AI) compute capacity, and Starlink satellite communications service.

The decline in SpaceX’s stock price may continue in the short term, however, as over $100 billion in stock unlocks on Aug. 6. Waiting until after that to buy shares may be prudent.

Howard Smith 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.