SpaceX reported second-quarter earnings with $9.9 billion in negative free cash flow, driven by heavy capital spending after its $85.7 billion IPO, the largest ever. AI infrastructure revenue reached $7 billion in the quarter ending in September, up from $359 million a year earlier, while capital expenditures of $19.5 billion are expected to roughly double to about $40 billion. The article says the IPO funds would run out within two years at the current burn rate, so positive free cash flow will be needed. Musk targets annual recurring revenue of $500 billion to $1 trillion by the end of 2027, compared with $58.3 billion in the latest quarter, a goal the author considers unlikely. The author also notes a market cap of $2.15 trillion and a price-to-sales ratio of 69, and concludes the stock is likely overvalued and risky.
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