• Markets: The S&P 500 hit a record high yesterday as investors parsed signals from the White House that a deal to open the Strait of Hormuz was imminent (more on that later). Elsewhere, Wayfair soared after it said that you’re buying a lot of bed frames and decorative trays again following a post-pandemic slowdown.

ATMOSPHERIC PRESSURE

Morning Brew Inc., Photo: Unsplash

SpaceX’s first earnings report since it went public in June wasn’t out of this world, but it was better than experts predicted. Elon Musk’s rocket, satellite, and AI company’s Q2 revenue jumped 92% over the same time frame last year.

Shares of the company fell in post-close trading immediately after the announcement, likely a response to high reported expenditures, despite all three segments of the company posting better-than-expected revenue. Via StreetAccount:

• Connectivity ($4.29 billion) was the company’s only profitable arm, with Starlink’s satellite service generating $1.66 billion in operating income.
• The Space and AI businesses exceeded expectations, but Space had operating losses of $542 million, and AI wound up $1.26 billion in the red.

SpaceX had $18.4 billion in capital expenditures during Q2, with nearly $16 billion of that spending in AI. The company has said it will take years for AI spending to bring a return on investment.

More stock volatility incoming?

SpaceX stock has been on a wild ride since its mid-June IPO. They debuted at $135, reached a high of $225, plummeted to a low of $108 to close last week, but ticked up over the first two days of this week to finish at $125.33 yesterday before the after-hours sell-off.

Starting tomorrow, early investors looking to cash out are eligible to sell ~900 million shares—more than double what’s currently available in the market—worth more than $100 billion. And that’s just the beginning:

• After the company reports its Q3 earnings in November, another 1.3 billion shares will be eligible to be sold.
• Musk owns ~6.4 billion shares, and while it’s unlikely he will unload them when eligible next June, even selling off a portion could hurt the stock price.

Elon’s take: The SpaceX CEO boasted about the company’s potential in AI infrastructure compared with rivals, telling analysts it’s like “the New York Yankees going in and playing a Little League team.” He also said he wants to go full Bond villain and put a mass accelerator on the moon to launch satellites from the lunar surface. “I know that sounds totally nuts,” he said.—DL

      

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