SpaceX’s $7.7 B AI Spend Triggers Market Revaluation and Share Drop

In the first quarter of 2026, SpaceX allocated $7.7 billion to its AI segment—essentially the xAI subsidiary—accounting for about 76 % of the company’s total capital budget. The AI unit posted a loss of roughly $2.5 billion in the quarter, contributing to SpaceX’s overall operating loss of $1.9 billion on $4.7 billion of revenue.

Following SpaceX’s June IPO and inclusion in the Nasdaq‑100, the market valuation fell from over $2.5 trillion to below $2 trillion, with shares down about 22 % from their peak. Expected forced buying by index funds failed to materialize, and the spread on the company’s $25 billion debt issue widened, pushing its rating into junk‑bond territory. The broader AI sector shows signs of fatigue, as investors grow wary of soaring valuations that outpace revenue growth, while the S&P 500 edges toward a record amid a rebound in AI‑related stocks.