Short Sellers Raise SpaceX Bets to $25 Billion as First Earnings Near

Q: Can Starlink's booming profits fund the multi-billion dollar cash burn from Musk's high-risk AI venture, xAI?

Not on its own, at least not comfortably. Starlink is clearly SpaceX’s profit engine, but the numbers in the company’s filings suggest xAI’s losses and capital needs are larger than Starlink’s current earnings power. Starlink generated about $11.4 billion in 2025 revenue and roughly $4.4 billion in operating income, with adjusted EBITDA around $7.2 billion. It now accounts for most of SpaceX’s revenue and is growing fast, with subscribers roughly doubling to more than 10 million by early 2026. That gives SpaceX a real internal cash source. But xAI is consuming cash at a much faster rate. The AI segment posted an operating loss of about $6.35 billion in 2025, and AI-related capital spending reached roughly $12.7 billion that year. In the first quarter of 2026 alone, AI capex was about $7.7 billion. At the group level, SpaceX reported a net loss near $5 billion in 2025 and negative free cash flow of roughly $22.8 billion, showing that Starlink’s profits are being overwhelmed by broader spending. That means Starlink can help subsidize xAI, and likely already does, but it cannot fully fund the AI buildout without outside capital, balance-sheet cash, or continued borrowing. SpaceX’s recent $25 billion debt sale and IPO proceeds underline that point. The key risk for investors is that Starlink’s strong cash generation is being used to support a far more speculative, capital-intensive AI bet whose payoff remains uncertain.

3 articles · Updated · CNBC · Jul 21

$25 billion in bearish wagers now targets SpaceX, with about 206 million shares sold short—32% of its tradable float—up from 185 million shares, or 29%, just last week.
S3 Partners said traders are adding exposure ahead of SpaceX's first quarterly earnings report as a public company on Aug. 4 and later lock-up expirations that could release more shares.
Elon Musk pushed back on X, saying firms that keep significant short positions in SpaceX face a "very low" survival probability over time.
SpaceX shares rose about 3% to around $124 on Tuesday after Macquarie reiterated an outperform rating, though the stock remains below its $135 IPO price after a post-listing pullback.

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A 900% potential increase in tradable shares looms. Can SpaceX stock defy gravity when the lock-up expirations hit?

With $25 billion bet against SpaceX, will its first earnings report justify Elon Musk’s confidence or vindicate the skeptics?

Can Starlink's booming profits fund the multi-billion dollar cash burn from Musk's high-risk AI venture, xAI?

SpaceX’s $1.77 Trillion IPO: Volatility, Lockup Expirations, and the Battle Over Valuation in 2026

Overview

In early August 2026, SpaceX faces a pivotal moment as its first public earnings report, a major lockup expiration, and the 13th Starship test flight all converge. These events are set to test investor sentiment and could bring significant volatility to the stock, which has already seen turbulence since its IPO. The market is closely watching how SpaceX’s rapidly growing revenue, driven by Starlink and Starship, measures up to its high valuation. The influx of new shares from the lockup expiration and the outcome of the Starship flight will play a crucial role in shaping the immediate direction of SpaceX’s stock.

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