SpaceX Shares Plunge 16% on $20 Billion AI Borrowing Plan
SpaceX shares fell 16% Monday following a regulatory filing revealing the company plans to sell investment-grade bonds to raise approximately $20 billion. The funds could bankroll costly AI development and the construction of data centers in space, according to reports, marking a third straight day of declines for the company.
Why are SpaceX shares declining?
The stock closed Monday at $154.60, leaving the company with a $2.03 trillion market capitalization. This drop follows a trend where shares fell more than 8% last Wednesday and Thursday, according to market data.
Investors reacted to the news of a potential “borrowing binge” via senior unsecured notes. Dan Ives, a managing director at Wedbush Securities, stated that investors remain “skittish” about debt offerings, though he noted such moves are common in the current “AI arms race.”
How is the company financing AI development?
SpaceX is turning to debt markets to fund its AI initiatives, a move similar to recent indications from Alphabet, Amazon, and Nvidia. In February, Elon Musk merged SpaceX with his AI startup, xAI.
A regulatory filing disclosed that SpaceX holds about $100.8 billion in cash. However, spending has accelerated; first-quarter spending reached $10.1 billion this year, with AI accounting for $7.7 billion of that total. This is a significant increase from the $4.1 billion spent in the same period last year.
What are the company’s current financials?
The company is burning through cash rapidly. SpaceX lost nearly $5 billion last year, with annual capital expenditures totaling $20.7 billion.
Starlink, the company’s satellite internet provider and a major government contractor, was the sole profitable division in 2025. Retail investors have shown strong support for the stock, with Vanda Research reporting that everyday traders bought $405 million in shares during the first five sessions after the IPO.
What may happen next for SpaceX?
The company may continue to leverage debt to sustain its capital expenditure buildouts. According to Scott Martin, a partner at Kingsview Wealth Management, investor enthusiasm is driven more by a belief in Musk and future industries than by current financials.
Because expectations are “getting very high,” future share performance may depend on the company’s ability to dominate industries that do not yet fully exist. SpaceX could also focus on its long-term goal of allowing humans to colonize Mars, as stated by Musk.
Frequently Asked Questions
- How much money does SpaceX plan to raise through bonds? According to reports and a regulatory filing, the company aims to raise about $20 billion.
- Which division of SpaceX was profitable in 2025? The satellite internet service provider Starlink was the company’s sole profitable division in 2025.
- How much did SpaceX spend on AI in the first quarter of this year? SpaceX spent $7.7 billion on AI in the first quarter.
Do you believe the pursuit of AI in space justifies the increase in corporate debt?