SpaceX shares fell more than 8% in Wednesday morning trading after the company reported stronger than expected second quarter results, as concerns over its rapidly expanding artificial intelligence spending overshadowed growth across Starlink and its cloud computing business.

The stock traded near $114.60 late Wednesday morning, down approximately 8.6% for the session after falling as low as $109.41. The decline pushed SpaceX further below the $135 price set during its June initial public offering.

SpaceX reported $7.81 billion in second quarter revenue, an increase of 92% from the same period last year and above analyst estimates of roughly $6.8 billion. The company posted a net loss of $541 million, considerably narrower than the approximately $1.9 billion loss expected by analysts.

The stronger results marked SpaceX’s first quarterly report since becoming a publicly traded company. Shares initially fell about 7.5% in extended trading Tuesday before the selloff continued after markets opened Wednesday.

Investor attention centered on SpaceX’s capital expenditures, which reached $18.4 billion during the quarter. Of that amount, approximately $15.8 billion was directed toward artificial intelligence infrastructure, including data centers and Nvidia computing chips.

Quarterly capital spending increased from $10.1 billion in the first quarter and came in well above analyst expectations of approximately $13 billion. SpaceX executives also said spending would likely remain near second quarter levels during the next two quarters as the company expands AI computing capacity, Starship production and its next generation Starlink network.

The company remained deeply negative on free cash flow during the quarter as infrastructure spending outpaced cash generated by its operating businesses. SpaceX raised approximately $85.7 billion through its June public offering, with second quarter capital expenditures representing more than one fifth of those proceeds.

SpaceX said its AI business generated approximately $2.6 billion in quarterly revenue, more than triple the amount reported a year earlier, although the segment remained unprofitable on an operating basis.

Chief Financial Officer Bret Johnsen said new computing investments were producing payback periods of less than one year. SpaceX also signed another $6.7 billion in cloud computing agreements following the end of the quarter and expects its computing capacity to exceed two gigawatts by the end of 2026.

The company is seeking to position its AI infrastructure business as a new source of growth alongside Starlink, rather than relying entirely on satellite connectivity revenue to finance continued expansion.

However, investors remain concerned about whether revenue from the developing AI business will increase quickly enough to support the company’s spending plans. SpaceX said capital expenditures will remain elevated as it continues building terrestrial data centers while developing longer term plans for computing infrastructure in orbit.

The earnings report comes less than two months after SpaceX completed its public listing. The stock has already fallen below its initial offering price, with investors also preparing for the expiration of restrictions that currently prevent some early shareholders and insiders from selling their positions.