SpaceX's $18 billion problem 🚀

Welcome back to the Day Trading newsletter 📈

The Dow ground out another record close Wednesday (its fifth straight winning day) but the Nasdaq slipped as the market's newest mega-cap handed in its first report card and got sent straight to detention.

Let’s get into it 👇️ 

🛒 Shopify soared 17% Wednesday after a monster quarter that beat on every metric. Revenue jumped 34% to $3.58 billion, gross merchandise volume rose 32% to $115.57 billion, and management guided for low-thirties percentage growth again in Q3. The company says AI-driven orders are a big part of the acceleration. 

💉 Eli Lilly crushed estimates and raised its full-year outlook as the weight-loss boom rolls on. Adjusted EPS of $8.38 smashed the $6.01 consensus, with Mounjaro revenue up 91% to $9.9 billion and Zepbound adding $4.9 billion in U.S. sales. Lilly now sees 2026 revenue of $85–87 billion, and shares climbed Wednesday.

🔼 Caterpillar surged after crushing Q2 estimates and raising its 2026 outlook on data center demand. Revenue grew 24% to $20.5 billion, adjusted EPS hit $8.17, and backlog reached a record $72 billion — much of it generators and turbines powering the AI buildout. The AI trade is officially expanding beyond tech.

🔻 AMD fell 6.9% Wednesday even after posting record revenue of $11.5 billion. EPS of $1.66 beat the $1.55 consensus and guidance topped estimates, but gross margin missed (54% vs. 56% expected) as AI infrastructure costs ramped. Like SpaceX, it's proof this market punishes anything short of perfection from the AI trade.

🎬️ Disney jumped 4.6% after "Toy Story 5" powered a big earnings beat. The film has crossed $1 billion at the global box office since June, driving entertainment operating income up 64%. Parks revenue grew 10%, streaming profit more than doubled, and adjusted EPS of $2.06 came in 28% higher than a year ago.

🤝 A deal to reopen the Strait of Hormuz could come "today or tomorrow," a senior Trump administration official said Tuesday. Oil barely moved on the headlines — Brent held near $80 — as traders weighed peace hopes against a Houthi claim of an attack on a Saudi tanker. A signed deal would likely mean cheaper crude and gas. 

💼 Private-sector hiring nearly stalled in July: ADP counted just 44,000 new jobs, the weakest print in six months. Economists expected around 70,000. Leisure and hospitality shed 11,000 positions, and annual pay growth held at 4.4%. It's a soft appetizer ahead of Friday's official July jobs report — and a live September Fed meeting.

💸 Bitcoin steadied near $64,000 as institutional buyers quietly stepped back in. U.S. spot Bitcoin ETFs pulled in more than $170 million on Tuesday, with BlackRock's IBIT alone taking $111 million. After sitting out this week's record-setting stock rally, crypto traders are now watching the Hormuz talks and Friday's jobs report for direction.

In its first earnings report since June's blockbuster IPO, SpaceX beat on nearly every line.

Revenue hit $7.81 billion, up 92% from a year ago and well above the $6.93 billion analysts expected, while the loss came in at just 9 cents a share versus the 26-cent loss forecast.

Starlink subscribers doubled to 12 million, and the company's young AI compute business (selling data center capacity to customers like Anthropic and Google) surged 247% to $2.56 billion in revenue.

None of it mattered.

Capital expenditures exploded sixfold to $18.4 billion, with $15.8 billion of that going to AI infrastructure (far beyond the roughly $13.2 billion analysts had penciled in).

Shares sank 13% Wednesday, leaving the stock roughly 50% below the $225.64 peak it touched shortly after going public.

SpaceX just became the poster child for the question haunting this entire earnings season: when does AI spending stop being an investment story and start being a cash-burn story?

The same fear knocked AMD down this week despite record results.

There's also a mechanical problem. The first earnings report starts the clock on the expiration of insider lockups, meaning employees and early investors can begin selling shares.

Analysts warn that unlock could pressure the stock for weeks. Elon Musk didn't calm nerves by pitching a $1 trillion long-term revenue target and robot missions to the moon on the call.

Investors wanted to hear about payback periods, not moonshots.

What to watch:

• Whether the lockup triggers the wave of insider selling analysts expect

• Whether SpaceX's claim that new AI compute deployments pay for themselves in under a year holds up in the numbers.

• Friday's July jobs report is the next big macro catalyst ahead of a live September Fed meeting

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⚠️ Disclaimer: Not financial advice. Do your research before making any trades.