SpaceX shares edged higher in pre-market trading on Thursday after suffering a sharp decline of nearly 14% in the previous session following the company's first earnings report as a publicly listed firm. The stock rose 1.63% to $110.03 in pre-market trading after closing at $108.27 on Wednesday, when investors reacted to significantly higher capital expenditure linked to the company's expanding artificial intelligence business despite earnings that exceeded Wall Street expectations.

The sell-off came after SpaceX reported a substantial increase in spending during the first half of the year. The company said its capital expenditure reached $28.5 billion, more than four times the amount spent during the corresponding period last year. The surge in investment was largely driven by founder Elon Musk's aggressive expansion into artificial intelligence, raising concerns among investors about the pace of spending relative to current revenue generation.

According to Bloomberg, SpaceX generated $3.38 billion in revenue from its artificial intelligence operations during the first six months of the year, significantly lower than the revenue generated by its satellite connectivity business centred on Starlink. While the AI segment continues to grow, analysts noted that its revenue has yet to match the scale of the company's investment. The higher expenditure weighed on investor sentiment despite the company's stronger-than-expected financial performance.

Also Read: SEBI Detects Alleged Coordinated Trading In Osiajee Texfab Shares After Rally

Since its stock market debut in June, SpaceX shares have experienced considerable volatility. The stock initially rallied nearly 49% within days of listing before reversing course and falling below its initial public offering price just over a month later. Wednesday's decline marked one of the sharpest single-day losses since the company's listing, reflecting investor concerns over elevated spending and the timeline for returns from its AI investments.

Despite the recent correction, several brokerage firms continue to maintain a positive long-term outlook on the stock. According to Bloomberg data, Goldman Sachs, UBS and Deutsche Bank have retained their "Buy" ratings on SpaceX, while Bernstein and Macquarie continue to recommend the stock with "Outperform" ratings. Analysts believe the company's long-term growth prospects remain supported by its leadership in satellite communications, space technology and emerging artificial intelligence initiatives, although investors are expected to closely monitor future spending and profitability.

Also Read: SEBI Ends RHI Magnesita Insider Trading Proceedings Over Incomplete Evidence