SpaceX Stock Drops on Ballooning AI Bill -- WSJ

By Heard on the Street Staff

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What Happened in Markets Today

SpaceX shares dropped 14%. A lockup period expires Thursday for some employees and investors to sell portions of their shares, which could bring extra volatility. Elon Musk's space company late Tuesday said its capital expenditures topped $18 billion last quarter, double the previous quarter's total, mainly tied to its artificial-intelligence build-out. The figures rattled investors nervous about uncertain payoffs. AMD shares also fell 7% after Musk said SpaceX would exclusively use chips from rival Nvidia, shares of which gained 4%.

Google announced new leadership of its AI operations. Among the changes, Demis Hassabis is stepping down as chief executive of Google DeepMind to become chairman and chief scientist, and Jeff Dean, the current chief scientist, is leaving with three other company veterans to launch a new AI startup. The changes follow a wave of high-profile departures and delays in releasing a model on par with top offerings from Anthropic and OpenAI. Shares of Alphabet, Google's parent, fell 4%.

Eli Lilly gained 5% after topping earnings and revenue estimates. The drugmaker reported soaring demand for its weight-loss treatments Mounjaro and Zepbound, both of which saw sales surge from the previous year.

Shake Shack shares rose 12%. The head of Starboard Value said the activist investment firm has built a stake in the burger chain. Starboard CEO Jeff Smith said the firm has a position in the stock worth several hundred million dollars. The company's stock has fallen sharply over the past 12 months, amid a tough stretch for many large fast-food companies.

The Nasdaq fell 0.8%, in part due to the drag from SpaceX. The Dow industrials gained 0.5% to close at a record. The S&P 500 fell 0.2%. Gold rose almost 4%.

Markets at a Glance

One Big Story

Situational Awareness, the hedge fund whose aggressive AI bets soured badly in July, is backed by a formidable lineup of Silicon Valley and Wall Street investors who put their faith in a 20-something founder with no prior professional investing experience.

Among the fund's investors are Dan Sundheim, founder of the hedge fund D1 Capital Partners and a major SpaceX shareholder; Silicon Valley investor Neil Mehta, co-founder of venture-capital firm Greenoaks; the foundation of Gaurav Kapadia, founder of investment firm XN; and Feroz Dewan, the former head of public equities at Tiger Global Management, according to people familiar with the matter.

What's Coming Up

-- Companies scheduled to report quarterly results Thursday include ConocoPhillips, Cloudflare, Datadog, Constellation Energy and Monster Beverage.

-- Economic reports due Thursday include initial jobless claims, U.S. productivity and wholesale inventories.

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About Us

Markets P.M. catches you up on the day's most important markets moves, delivered after the closing bell. This email was written by Jonathan Weil, a columnist for Heard on the Street, The Wall Street Journal's home for financial analysis and commentary. To send us your feedback, reply to this email. Got a tip for us? Here's how to submit.

(END) Dow Jones Newswires

August 05, 2026 16:31 ET (20:31 GMT)