Space Exploration Technologies Corp. (NASDAQ:SPCX) is expected to significantly increase spending, partly driven by joint projects with Tesla Inc. (NASDAQ:TSLA), with analysts forecasting negative free cash flow.
Bill Birmingham, MD of exchange-traded product provider Rex Shares, told MarketWatch, “They’re going to be spending cash for the indefinite future. The idea of free cash flow is just not part of the story.”
Birmingham said SpaceX’s upcoming earnings will also signal the timing and valuation of its next capital raise, not just its outlook for the second half of 2026.
SpaceX is expected to significantly increase spending, partly due to joint projects with Tesla. Just weeks after its IPO raised nearly $86 billion, SpaceX borrowed an additional $25 billion in debt.
Analysts forecast $13.2 billion in second-quarter capital expenditures, nearly $46 billion for 2026, and $87 billion for 2027, alongside negative free cash flow of $1.9 billion for the June quarter, as per the report.
Bernstein analysts said SpaceX’s quarterly results are less important than management’s confidence in the company’s long-term growth outlook, according to MarketWatch.
Investors are looking for updates from SpaceX, particularly from CEO Elon Musk, on Starship’s progress, semiconductor availability, AI resource constraints, and the company’s broader plans.
Big Tech Doubles Down On AI
Investors are closely watching AI-related capital spending as hyperscalers ramp up investments. Moody’s recently projected that hyperscaler capex will reach $785 billion in 2026 and nearly $1 trillion in 2027, before Amazon.com Inc. (NASDAQ:AMZN) and Meta Platforms Inc. (NASDAQ:META) further increased their spending plans.
Amazon raised its 2026 capital spending target from $200 billion to $220 billion due to higher memory chip costs. CEO Andy Jassy said the company has multiple financing options after its recent bond sale but declined to disclose how it will fund future AI and AWS investments.
Meanwhile, Tesla plans to significantly increase spending on vehicles, autonomy, and robotics, with CEO Elon Musk and CFO Vaibhav Taneja calling 2026 a “massive CapEx year.” The company reported a record $5.79 billion in second-quarter capital expenditures, up 142% year over year, while GAAP operating expenses rose 47% to $4.35 billion.
"Note that we are in a big investment cycle and expect our operating expenses, largely driven by R&D, to continue to grow in 2026 and beyond, " said Taneja.
SPCX Price Target: On a year-to-date basis, the SpaceX stock declined 32.67%, as per Benzinga Pro. It is trading 1.43% lower at $108.37 during Monday’s pre-market trading session.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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