Elon Musk’s SpaceX faces an earnings test on Tuesday that could determine whether investors regain confidence in one of Wall Street’s battered space technology funds.
The Global X Space Tech ETF (ORBX) held 25.44% of its assets in SpaceX as of 16 October, giving the rocket and satellite company an outsized influence over its performance.
Analysts expect surging Starlink and artificial intelligence revenue to help SpaceX return to quarterly profit. But the company’s expensive expansion plans and weakness elsewhere in the space sector complicate hopes of a lasting ETF recovery.
Can SpaceX deliver the growth investors expect?
Wall Street expects SpaceX to report third-quarter revenue of $12.89 billion, up approximately 65% from a year earlier, according to TipRanks.
Consensus estimates point to earnings of 14 cents a share, against a nine-cent loss in the preceding quarter.
The growth case rests heavily on Starlink and AI. In the second quarter, SpaceX’s connectivity revenue rose 66% to $4.29 billion, while AI revenue surged approximately 247% to $2.56 billion.
Starlink’s expansion into direct-to-cell connectivity offers another potential revenue stream. The network already includes approximately 650 satellites equipped for the service, with regulatory approval for 15,000 more.
However, The Motley Fool analyst Rich Smith cautioned on 18 October that network expansion does not guarantee equivalent financial gains.
“How much that translates into revenue growth and earnings growth, of course, remains to be seen,” Smith wrote.
Will Musk’s spending overwhelm another strong quarter?
Revenue growth tells only part of the story. SpaceX spent $18.4 billion on capital expenditure in the second quarter, including $15.83 billion on AI infrastructure, according to its results filed with the SEC.
The company ended June with substantial cash reserves, but maintaining spending at that pace could still pressure free cash flow and shareholder patience.
Despite $7.8 billion in quarterly revenue, the company reported an operating loss of $143 million.
Its ambitions extend beyond data centres. Starship development, new satellites and an approximately $8 billion wireless spectrum transaction could keep investment requirements elevated.
Financial columnist James Mackintosh highlighted a broader danger facing the AI investment boom.
“An even bigger risk: construction continues at full speed,” he wrote in the Wall Street Journal.
Mackintosh’s warning concerned AI infrastructure generally, not SpaceX specifically. But the comparison is relevant, as investment can generate extraordinary supplier revenues without ensuring attractive returns for the companies funding expansion.
Investors will therefore examine cash generation and spending guidance as closely as revenue growth.
Can SpaceX rescue the entire ETF?
Global X’s latest holdings show ORBX owned approximately $8.99 million of SpaceX shares, representing 25.44% of its $35.34 million portfolio.
Rocket Lab accounted for 8.75%, while AST SpaceMobile represented 7.66%. Other holdings expose investors to additional satellite and infrastructure businesses.
That concentration makes SpaceX important, but not all-powerful.
Assuming its weight stays unchanged, a hypothetical 10% SpaceX rally would add roughly 2.54 percentage points to ORBX’s value if every other holding remained flat, ignoring fees and tracking effects.
Strong results could spark a rebound, but restoring confidence requires more than one earnings beat.
SpaceX must demonstrate that Starlink and AI growth can justify their investment costs, while the ETF’s other holdings must also stabilise.
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