SpaceX (NASDAQ:SPCX) faces visible risks whenever Starship reaches the launchpad, as scrubs, explosions and engine failures generate dramatic headlines. However, artificial intelligence spending could create a larger threat for SpaceX stock.
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Alphabet’s AI Spend Warning
Alphabet Inc. (NASDAQ:GOOGL)(NASDAQ:GOOG) offers a warning. Google’s parent just recorded its most profitable quarter ever. Revenue climbed 24%, while cloud revenue surged 82%.
Still, Alphabet shares dropped after AI capex overwhelmed the company’s operating cash flow.
Alphabet spent $44.9 billion on capital projects during the quarter. Operating cash flow reached $39.1 billion, leaving the company with negative free cash flow of $5.9 billion. It marked Alphabet’s first negative free-cash-flow quarter since its 2004 initial public offering.
Microsoft Corp. (NASDAQ:MSFT) is tracking toward roughly $190 billion in calendar-year AI spending, and combined hyperscaler capex could approach $725 billion this year.
SpaceX’s Capex Challenge
Those figures illustrate the scale of SpaceX’s challenge.
SpaceX inherited an expensive AI operation through its combination with xAI. Training advanced models requires chips, data centers, networking equipment and enormous amounts of electricity. The costs arrive before AI contracts produce dependable returns.
SpaceX recently sold $25 billion in bonds across five maturities. The company said proceeds would repay bridge financing and support general corporate purposes. Reuters described the offering as funding for a capital-intensive AI expansion requiring tens of billions in infrastructure investment.
SpaceX has begun monetizing its AI infrastructure. Reflection AI agreed to purchase computing capacity from SpaceXAI, and Google also signed a multiyear computing agreement with the company.
Yet Alphabet’s quarter shows why revenue growth may not settle the debate. Investors increasingly want proof that AI spending can produce cash, margins and sustainable returns.
Rocket development offers visible milestones while AI infrastructure provides fewer clear checkpoints.
For SpaceX stock, Starship’s progress remains important, but the larger valuation test may be whether SpaceX can avoid the cash-flow pressure now hitting the world’s richest tech companies.
SPCX Stock Price Activity: SpaceX shares were down 0.75% at $114.40 at the time of publication Thursday, according to Benzinga Pro data.
Photo: JRdes / Shutterstock
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