- SpaceX shares fell after earnings despite reporting stronger-than-expected revenue and AI profitability.
- More than 900 million shares are beginning to unlock, with billions more expected to become tradable before year-end.
- Investors are closely watching whether increased share supply creates additional pressure on the stock.
SpaceX investors are shifting their attention from the company’s impressive earnings to a much more immediate concern: a massive wave of shares becoming eligible for trading. While the company delivered a strong first quarterly report as a public company, many traders believe the stock could remain volatile as insiders and early investors gain the ability to sell portions of their holdings.
The company reported $7.8 billion in revenue, comfortably ahead of Wall Street’s estimate of $6.8 billion. Its artificial intelligence division also surprised analysts by generating $1.1 billion in EBITDA, compared with expectations for a small loss. Despite those results, SpaceX shares dropped roughly 12% after earnings, though much of that decline followed a nearly 16% rally during the two trading sessions leading up to the report.
Share Unlock Could Drive Short-Term Volatility
One of the biggest reasons investors remain cautious is the company’s lockup schedule. Beginning Thursday, up to 911.5 million shares became eligible for trading, representing more than 140% of the publicly tradable shares available immediately following the IPO.
Additional unlocks are scheduled over the coming months. Around 319 million more shares may become tradable on Aug. 12, with another 319 million shares expected roughly 20 days later. By the end of the year, more than 4 billion shares could enter the public market, significantly increasing available supply.
Many investors worry that some insiders and early backers will sell shares to realize gains, creating downward pressure even if the company’s underlying business continues performing well.
Strong Business Fundamentals Remain Intact
Despite the market reaction, SpaceX’s operating performance remains strong. The company continues benefiting from expanding AI infrastructure demand while its core aerospace business delivers solid revenue growth.
During the earnings call, CEO Elon Musk suggested SpaceX could eventually generate $1 trillion in annual revenue by 2029. Wall Street remains considerably more conservative, with analysts projecting approximately $284 billion in annual revenue by that time, which would still represent exceptional growth.
The company’s AI business has become an increasingly important contributor, posting positive profitability much sooner than many analysts anticipated.
Investors Focus on Supply Before Fundamentals
The stock’s recent volatility also reflects positioning by short sellers and traders attempting to navigate the upcoming lockup expirations. Markets often price in expected events before they occur, meaning some of the selling pressure may already be reflected in the current share price.
Looking further ahead, Elon Musk’s approximately 6.4 billion shares, including stock options, are not expected to become freely tradable until June 2027. While Musk is generally not expected to sell a significant portion of his holdings, investors will continue monitoring the lockup schedule over the coming months.
Once the remaining share unlocks are absorbed by the market, investor attention is likely to shift back toward SpaceX’s long-term growth prospects, AI expansion, and revenue trajectory rather than technical trading factors.
