SpaceX Surprises with Q2 Results… Data Center Leasing Diversifies Revenue

Jung Eui-hoon, Researcher at Yujin Investment & Securities, said he received many complaints from investors after SpaceX's share price plunged. SpaceX shares soared with high expectations at the time of listing but then fell sharply, raising investor concerns. Researcher Jung said he felt the need to be clearer and more careful when conveying his views to investors.

He explained that because SpaceX has a business structure different from other big tech companies, it is difficult to apply traditional valuation models. He has stressed that, given the special nature of the aerospace industry, long-term growth potential should be looked at rather than short-term earnings, but the sharp share price decline drew investor dissatisfaction.

Based on this experience, Researcher Jung said that going forward, when delivering analysis on innovative companies like SpaceX, he will improve by explaining the underlying business structure and growth drivers in more detail, not just the earnings figures.

First, the high valuation burden that the market has repeatedly pointed out. SpaceX was valued at a high enterprise value even before listing, but because the space industry takes time to generate actual profits, this acted as a burden for short-term investors.

Second, operating results through Q1 fell short of expectations. Compared with the company's growth potential, actual revenue and profit were not sufficient to support it, which deepened investor disappointment. Third, the lock-up expiry issue that persisted from right after listing. As the sales restriction period ended for shares held by early investors, supply entered the market and acted as downward pressure on the share price.

Unlike the weak results through Q1, Q2 showed performance exceeding market expectations, which he analyzed as resolving the main causes of the share price decline.

Researcher Jung said that after the earnings release he personally bought SpaceX shares, and added that he is considering further purchases before and after the next important event. This suggests he highly values SpaceX's long-term growth potential and the positive changes shown in these results.

He also expressed expectations that as SpaceX begins to show tangible results in new businesses such as AI and data centers, beyond being just a space company, its corporate value will be re-rated.

Researcher Jung Eui-hoon said that before SpaceX's earnings release he watched three key factors. The first is the overall quality of results: basic financial indicators such as revenue and operating profit are used to gauge the company's overall soundness.

The second is CAPEX (capital expenditure) scale and cash flow health, as with other big tech companies. SpaceX runs businesses requiring huge investment, such as Starship development and Starlink satellite launches, so how efficiently investment is made and whether the resulting cash flow is stable matter. The third is the specific plans and goals of each business segment. He gauges the company's future growth drivers through the strategies and outlooks for rocket launches, Starlink, and the newly started AI and data center businesses.

He explained that a large portion of the 2025 operating loss came from the AI business. Specifically, he mentioned that Starlink earned $4.4 billion and the rocket launch segment recorded a $0.7 billion loss, but the AI business alone posted a massive $6.4 billion loss.

This shows SpaceX has also made large-scale investments in AI beyond the space industry. It is interpreted that as substantial capital was poured into building infrastructure for Elon Musk's AI company 'Grok', overall profitability temporarily deteriorated. Researcher Jung pointed out that losses from this AI investment could be mistaken for a fundamental problem of the space business.

Through Q1, it mainly used computing resources to develop and expand its own AI service Grok, but it has now begun generating revenue by leasing spare computing power to external companies.

Researcher Jung Eui-hoon compared this business model to the past case of Meta using its own data center resources to generate external revenue. SpaceX is reportedly now securing major AI companies such as Anthropic and Google as tenants. This worked as a positive factor that can largely dispel market concerns over massive CAPEX (capital expenditure).

This new revenue source is expected to diversify SpaceX's revenue structure and serve as an important foothold for entering the fast-growing AI infrastructure market. Securing an additional stable revenue stream beyond the space business is expected to contribute to corporate value growth.

Researcher Jung Eui-hoon cited rising business-to-business (B2B) demand as the main reason. Previously, as new subscriber countries expanded mainly in Asia, ARPU kept declining due to low monthly fees.

However, in Q2, enterprise demand from airlines and shipping companies, along with military revenue such as the U.S. Department of Defense's 'Starshield', grew more than expected, succeeding in stopping the overall ARPU decline and keeping it flat. This shows the Starlink service is expanding beyond the individual consumer market into high-revenue markets such as enterprises and governments.

The expansion of Starlink's B2B revenue proves the stability and scalability of the service and is interpreted as a positive signal for long-term profitability improvement. Researcher Jung Eui-hoon stressed that this result was a factor that far exceeded market expectations.

Researcher Jung Eui-hoon stressed that the Starship 14th test launch is very important. The core goal of this launch is to successfully recover both Starship's first-stage rocket 'Super Heavy' and second-stage rocket 'Starship'. The first-stage rocket returns to the ground after launch and is caught, a method that has succeeded once or twice before.

In the 14th launch, however, the goal is to recover the second-stage rocket Starship as well. After sending satellites into space, the second-stage rocket is expected to orbit the Earth once, return to the launch site, and be caught at the landing point. Technology that fully reuses both first and second stage rockets is evaluated as a core technology that could dramatically cut space launch costs.

If the 14th test launch concludes successfully, SpaceX is expected to secure a unique competitive advantage in the commercial launch market, which is anticipated to bring a major transformation to the entire space industry.

This is a striking level that includes only fuel costs and minimal maintenance costs for launch. Musk argued that Starship's launch cost could be cut to roughly one-hundredth of the existing Falcon 9 rocket. Researcher Jung Eui-hoon estimated that even conservatively, cost reductions of at least one-tenth would be possible.

Such cost reductions become possible as Starship reuses both its first and second stage rockets. If rocket parts can be used repeatedly instead of being newly manufactured each time, the unit cost of space launch services can be dramatically lowered. This is expected to play a decisive role in securing the economics of SpaceX's various space businesses, including space tourism, satellite launches, and Mars exploration.

Revenue from SpaceX's AI service Grok nearly doubled in Q2. Researcher Jung Eui-hoon said he did not think Grok was a major AI service, but was surprised to see its actual revenue growth. Grok is known for giving answers that are 'right-leaning', blunt, and sometimes harsh, in contrast to other AI chatbots that tend to lean 'left' or give politically correct answers, which created differentiation in the market.

This distinctive trait is analyzed as having appealed to certain user groups, resulting in higher-than-expected revenue growth. Researcher Jung Eui-hoon evaluated this revenue increase as evidence of Grok's potential and unexpected demand in the market.

This is because SpaceX presented a strong business model that can convert the cost invested in building data centers into revenue in a short period.

Researcher Jung Eui-hoon explained that SpaceX is already earning high returns through the data center space it has secured, and showed the market that this asset can be monetized in a short time. In a situation where demand for data center computing resources is surging, it confirmed that the infrastructure SpaceX invested in ahead of time is leading to immediate revenue creation.

This ability to recover investment quickly dispelled market concerns about SpaceX's financial soundness and raised confidence that it can sustain stable growth despite large-scale investment going forward.

This means building infrastructure far larger than its current data center capacity. Researcher Jung Eui-hoon evaluated this goal as very aggressive and not easy to achieve by general standards.

As demand for data centers surges with the advance of AI technology, SpaceX plans to make large-scale investments to preempt this market. This goal shows its intent to position itself as a major player in AI infrastructure beyond just being a space company. However, the concrete roadmap and funding plan for how it will achieve this ambitious goal will be a point to watch going forward.

It added that reaching the goal even in 2029 is not impossible. Researcher Jung Eui-hoon analyzed that this change suggests SpaceX views its future growth outlook more optimistically.

This is interpreted as reflecting the rapid expansion of the Starlink service, progress in Starship development, and the early successful results of the newly launched data center leasing business. SpaceX is expected to grow corporate value faster than anticipated, through its monopoly position in the launch market and expansion into new high-growth businesses.

He personally thinks semiconductor stocks are cheap, but pointed out that being cheap does not mean share prices will necessarily rise or fall. Although semiconductor stocks are undervalued relative to their worth, they are unable to earn investor trust and remain in a downtrend.

He analyzed that this zone of distrust is not simply due to weak earnings or economic conditions, but a combination of uncertainty across the industry and doubts about future growth. He explained that factors such as the semiconductor industry cycle, excess inventory, and the market's skeptical view of adopting new technology are acting together to create a situation of 'cheap but not rising'.

Therefore, Researcher Jung Eui-hoon stressed that for semiconductor share prices to rise again, a clear signal is needed to resolve this distrust and let investors believe in future growth potential.

Researcher Jung Eui-hoon described the current semiconductor market as a 'broken market', but forecast that it will not keep falling endlessly like an economic crisis. He analyzed that a quick 'V-shaped rebound' in the stock market would be difficult. For a V-shaped rebound to appear, investors' distrust of the semiconductor industry would need to be resolved, which is hard to achieve in a short time.

Instead, Researcher Jung Eui-hoon expected an 'L-shaped rebound'. This means share prices fall to a certain level, move sideways near the bottom for a long period, and then gradually recover. He added that although the shape looks like an L on a monthly chart, daily fluctuations may be severe. This suggests semiconductor stock investors should approach with patience from a long-term perspective.

This offers tenants the appeal of flexibly using computing resources on an 'on-demand' basis whenever needed. In other words, there is the advantage of not being tied to long-term commitments and using only as long as needed.

Researcher Jung Eui-hoon analyzed that SpaceX offers this flexibility while setting very high leasing rates to maximize profitability. Tenants sign contracts despite the high rates, which is understood as reflecting strong demand for a flexible service that allows them to secure and cancel resources immediately as needed. This is an important strategy that helps SpaceX secure a competitive advantage in the data center market.

Generally, when a child enters school, parents buy new uniforms and reference books. But SpaceX's data center leasing business is like parents lending out the uniforms and reference books they bought for their child to others who need them and earning income from it.

This analogy helps understand the business model in which SpaceX leases out the expensive computing infrastructure it built for its own AI development to other companies during periods of spare capacity to generate additional revenue. The host described Elon Musk's cold-blooded business sense, which pursues efficiency and profitability at the same time, as 'the ruthless Elon Musk dad', drawing laughs.

In Korea, minority shareholder protection and governance transparency are emphasized in mergers or business restructurings between affiliates, so moves perceived as serving the controlling shareholder's interests often have a negative impact on corporate value.

However, the host pointed out a difference from the Korean market, noting that in the U.S. such merger discussions often act as a factor raising share prices. The host explained that the U.S. market tends to place greater value on a company's growth potential and innovation rather than complicated governance controversies. This was cited as an example showing cultural and institutional differences between countries in business management and market evaluation standards.