Key Takeaways
- SpaceX reports earnings after the close on Oct. 20, and short seller Jim Chanos says it will be the largest global neocloud starting in 2027.
- SpaceX’s capital spending reached $20.9 billion in 2025, about three times the $6.8 billion of cash its operations brought in.
- Total debt rose to $24.5 billion at the end of 2025 from $15.4 billion a year earlier, and SpaceX is reportedly seeking $40 billion more to buy Nvidia chips.
- Starlink gives SpaceX a cushion that CoreWeave doesn’t have, but the report needs to show the compute business starting to pay for itself.
SpaceX (SPCX) reports earnings tomorrow after the close, on a date it only announced late last week. (Most companies give Wall Street weeks of notice.)
The setup going in is all about AI. On X, one user argued that if neocloud economics are deteriorating, that’s “not so hot for SPCX with its $120T TAM and orbital compute plans.”
Short seller Jim Chanos replied on Friday: “$SPCX is actually the largest global neocloud, starting in 2027.”
Quite the label for a rocket company. And the numbers going into tomorrow’s report back him up.
Starlink is paying for everything else
Nilay Patel, editor-in-chief of The Verge, summed up SpaceX’s business on Saturday’s episode of the Decoder podcast:
“Starlink is the thing that makes profits. Everything else is incinerating money, but investors seem happy with that because the potential payoffs might be huge.”
You can see the incinerating part in the cash flows. SpaceX’s capital spending nearly quintupled, from $4.4 billion in 2023 to $20.9 billion in 2025, while cash from operations rose from $4.5 billion to $6.8 billion.
So operations covered about a third of last year’s spending, which left free cash flow at negative $14.1 billion.
Credit markets have noticed
That gap has to be funded somewhere, and SpaceX has been borrowing. Total debt rose by more than half in 2025, from $15.4 billion to $24.5 billion.
And more is on the way. The Financial Times [reported](LINK NEEDED) on Oct. 6 that SpaceX is seeking $40 billion to buy Nvidia (NVDA) AI chips. The package reportedly breaks down as about $10 billion in bank loans and $30 billion in investment-grade debt. If it closes as reported, SpaceX’s debt more than doubles from where it ended 2025.
Evercore ISI analyst Kutgun Maral even listed “a desire to put updated financials on record ahead of further financing arrangements” among the possible reasons for tomorrow’s rushed date.
That’s why Ryan Detrick, chief market strategist at Carson Group, charted SpaceX’s five-year CDS spreads alongside those of Oracle (ORCL) and CoreWeave (CRWV) on Saturday: “This is why worry is building on AI.”
Starlink is the cushion CoreWeave doesn’t have
Still, SpaceX has something CoreWeave lacks: a business that, in Patel’s words, “makes profits,” and it feeds cash into the build every year.
And there’s plenty of demand for what SpaceX is building. On Sunday, Musk said SpaceX itself has hit a wall when it “tried to rent inference compute from AWS, GCP” to take load off its training clusters. If even SpaceX can’t find spare compute, there’s a market for whoever owns it.
Building it is the hard part. On Tuesday, Musk replied to a Zerohedge post about data-center debt selling off: “getting money to build complex hardware systems with massive power, cooling & networking is not the same as doing it.”
Even SpaceX, he added, finds it “very difficult!”
Chanos has the label right
I think Chanos is right. SpaceX already spends like a neocloud. Its operations covered only about a third of last year’s bill, and debt made up much of the rest. Starlink makes it a sturdier neocloud than CoreWeave, but the credit market’s worry is fair until the compute business starts paying its own way.
That’s what to watch tomorrow: any sign that AI revenue is starting to cover the spending, and what management says about capex and the $40 billion financing.
Of course, Chanos said 2027, so one quarter won’t settle this either way.
So what is SpaceX stock actually worth?
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