Jim Cramer believes Space Exploration Technologies Corp. (NASDAQ:SPCX) is evolving into a comprehensive technology and infrastructure company, leveraging its Starlink, AI computing, and Starship initiatives as key growth engines. On September 28 during an episode of Mad Money, he highlighted SpaceX's GPU operations and the recent Starship flight as indicators of the company's potential long-term value.
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Cramer has shown increasing optimism about SPCX, citing contracts that demonstrate substantial revenue potential. He noted that SpaceX's decision to invest in a large GPU business has started to bear fruit, with Elon Musk renting GPUs to Google at an annual rate of $11 billion and a similar agreement with Anthropic set to begin in October at a $15 billion rate. These deals aggregate to about $2.17 billion monthly in compute rentals.
The company's second-quarter financial results underscore the newfound significance of AI, with AI revenue reaching $2.56 billion—an impressive increase of 247% year over year—while total Cloud Services Agreements amounted to $14.1 billion. Cramer also discussed the vision for orbital data centers, referencing NVIDIA CEO Jensen Huang's comments on the economic potential of computing infrastructure in space. Although the idea has moved from the realm of theory, it is not yet commercially viable.
Cramer pointed out Google's efforts with its Project Suncatcher, a prototype satellite aimed at testing AI hardware in orbit, which is reportedly functioning as intended. Additionally, Cramer addressed the recent Starship flight on September 28, which successfully deployed 26 Starlink V3 satellites. However, the mission faced challenges when one of the six Raptor Vacuum engines shut down prematurely, reducing the planned mission duration from 10 hours to about three. Despite the setback, SpaceX managed to deploy all satellites, and the situation around the engine failure is being investigated.
On the financial side, Cramer also mentioned the significant capital demands faced by SpaceX. While the company generated $7.81 billion in revenue in the second quarter, it spent $18.37 billion on capital expenditures—a level more than double its revenue. Importantly, AI investments alone accounted for $15.83 billion of this spending, and even with rapid revenue growth, the AI segment is currently operating at a loss, recording a $1.26 billion operating loss despite $2.56 billion in revenue. This situation leaves the company reliant on achieving sustained growth and effective infrastructure management to eventually convert its investments into profitable earnings.