SpaceX's public-market debut has hit turbulence. The rocket-and-satellite company's shares tumbled more than 13 percent in a single day, erasing billions in market value just weeks after a record-setting IPO. The trigger wasn't a launch failure or a regulatory setback, but something far more mundane: the company's first earnings report as a publicly traded entity revealed spending levels that made investors balk. Main Developments On Wednesday, SpaceX stock closed at $108.10, a 13.6 percent drop from Tuesday's $125.33 close. The slide came one day after the Elon Musk-led company reported its first quarterly earnings as a listed firm. The sell-off was fueled by a dramatic surge in capital expenditure: $18.37 billion, a six-fold jump from the prior year and well above the $13.2 billion analysts had projected. Of that total, $15.8 billion is earmarked for artificial intelligence infrastructure — specialized compute, storage, networking, and software systems needed to build, train, and operate AI models at scale. SpaceX intends to expand its data center capacity from 1.4 gigawatts to 2 gigawatts by year-end, a goal that requires massive upfront investment. Read also: Sheikh Hasina vows December return despite death sentence The company argues its computing power isn't just for internal use. Grok, its AI model, runs on this infrastructure, but SpaceX also sells the capacity externally, with $14.1 billion in cloud-services agreements already signed. That commercial angle, however, hasn't calmed investors who are increasingly skeptical of AI spending across the tech sector. One bright spot was the connectivity business. Starlink subscribers doubled to 12 million year-over-year, pushing revenue up 66 percent and generating $1.66 billion in operating income. That segment's profitability stands in stark contrast to the heavy losses elsewhere. Background SpaceX went public on June 12 at $135 per share. Within days, the stock surged to $225, briefly making Musk the world's first trillionaire on paper. That meteoric rise has since given way to a steady decline, and Wednesday's earnings-driven drop marks a new low for the stock. The broader context is a tech industry-wide reckoning. Investors have spent the current earnings season questioning whether Big Tech's open-ended AI budgets will ever generate tangible returns. Josh Gilbert, lead analyst at trading platform eToro, notes that SpaceX faces that same scrutiny "with an added degree of difficulty because it's asking shareholders to bankroll data centres in orbit." Why It Matters The sell-off reflects a pivotal shift in investor sentiment. For years, SpaceX was a private darling, able to fund ambitious projects without quarterly accountability. Now, as a public company, it must justify spending that would strain even the largest tech giants. The stakes are high: if SpaceX can't convince the market that its AI infrastructure investment will pay off, it could face sustained pressure on its stock price, making future capital raises more expensive. Moreover, the company's dual identity as an AI infrastructure provider and a satellite internet service creates a complex narrative. The profitable connectivity business may help offset concerns, but the sheer scale of the AI bet — $15.8 billion in a single quarter — dominates the conversation. What's Next Thursday brings the first major test: the expiration of the post-IPO lock-up period. Up to 911.5 million shares — roughly 20 percent of restricted holdings — become eligible for sale. That's a potential flood of supply that could drive the stock even lower. Melissa Otto, head of Visible Alpha research at S&P Global, told Al Jazeera the stock is "likely to be volatile" once the lock-up lifts. Beyond the lock-up, investors will watch for signs that the AI infrastructure investment is translating into revenue growth. The $14.1 billion in cloud-services agreements is a start, but the market will want evidence of execution. With the year-end 2GW data center target looming, SpaceX has little room for delays.