SpaceX Stock Jumps 7.5% as AI Revenue Surges 830% and Q3 Profit Hits $4.4 Billion

Key Takeaways

• SpaceX shares rose approximately 7.5% after the company reported substantially stronger third-quarter earnings.
• Revenue surged 161% year over year to $14.6 billion, beating Wall Street’s forecast of approximately $12.9 billion.
• Net income reached $4.4 billion, reversing a $1.1 billion loss from the same quarter last year.
• Super Intelligence revenue jumped 830% to $7.6 billion, making artificial intelligence SpaceX’s largest business by sales for the first time.
• Starlink’s connectivity division generated $5.2 billion in revenue and $2.4 billion in operating income as subscribers reached 13.6 million.
• Elon Musk confirmed that independent committees at SpaceX and Tesla are exploring a potential merger, although no deal has been agreed.

SpaceX stock jumped approximately 7.5% after the rocket, satellite and artificial-intelligence company reported its first quarterly profit since going public.

Third-quarter revenue climbed 161% from a year earlier to $14.6 billion, comfortably exceeding Wall Street’s forecast of approximately $12.9 billion. Net income reached $4.4 billion, reversing a $1.1 billion loss in the same period of 2025.

The strongest growth came from SpaceX’s Super Intelligence division. AI-related revenue increased 830% to $7.6 billion, making it the company’s largest source of quarterly sales and pushing the business beyond its traditional identity as a rocket and satellite operator.

SpaceX released its results on October 20 following the closing bell, marking its second earnings report since its June IPO.

SpaceX Earnings Beat Wall Street Forecasts

SpaceX exceeded expectations across revenue, earnings and adjusted profitability.

The company reported adjusted EBITDA of approximately $8.8 billion, compared with the $6.4 billion analysts had projected. Earnings also came in well above consensus estimates, demonstrating that accelerating AI revenue is beginning to offset the extraordinary infrastructure spending required to expand the business.

The latest profit represented a significant turnaround from the previous quarter. SpaceX generated $7.8 billion in second-quarter revenue but recorded a net loss of $541 million as heavy investment in AI data centres, Starlink satellites and Starship development weighed on profitability.

The third-quarter results suggest that some of those investments are beginning to produce commercial returns much sooner than investors anticipated.

AI Becomes SpaceX’s Largest Business

The most important development was the performance of the Super Intelligence division, which includes AI computing infrastructure, Grok-related services and the Cursor coding platform.

Super Intelligence revenue reached $7.6 billion, increasing approximately 830% from the previous year and accounting for about 51% of total company sales. The division also generated an operating profit of $431 million.

Growth was supported by several factors:

• Activation of new cloud-computing agreements
• Rising enterprise and consumer adoption of Grok
• Revenue added through the Cursor acquisition
• Increased utilisation of SpaceX’s AI data centres
• Demand for computing capacity from hyperscalers and smaller AI developers

The result represents a major shift in SpaceX’s business model. The company is no longer primarily dependent on launches and satellite subscriptions. It is increasingly becoming an AI infrastructure provider competing for the same demand that has supported Nvidia, CoreWeave, Oracle and other data-centre companies.

SpaceX acquired AI coding platform Cursor for approximately $60 billion during the quarter. Its financial results also included around $1.2 billion of share-based compensation benefits associated with the transaction, meaning investors will need to distinguish between recurring operating profitability and acquisition-related accounting effects.

Nevertheless, the AI division’s positive operating income offers evidence that the business is moving beyond infrastructure construction and beginning to monetise its computing capacity.

SpaceX Plans Massive Data-Centre Expansion

SpaceX intends to scale its data-centre capacity from approximately 1.7 gigawatts to as much as 20 gigawatts by the end of 2027.

Management said demand remains strong from major technology companies and smaller AI developers that cannot secure sufficient computing capacity elsewhere. SpaceX also expects some of its AI infrastructure investments to achieve payback periods of less than one year.

The company projected infrastructure spending of between $35 billion and $40 billion during the December quarter. It also maintained its target of reaching a $100 billion annualised revenue run rate by the end of 2026.

For the first quarter of 2027, SpaceX projected revenue of approximately $33 billion to $37 billion, significantly above previous analyst expectations.

These forecasts helped support the stock rally, but they also raise execution risks. SpaceX must secure enough chips, electricity, data-centre equipment and customer demand to justify a rapid increase in capacity.

Capital Spending Reaches $19.6 Billion

SpaceX spent approximately $19.6 billion on capital projects during the third quarter, including $16.4 billion allocated to artificial-intelligence infrastructure.

The company ended the period with approximately $51.3 billion in cash and $38.8 billion in debt. Its current liquidity provides substantial capacity to continue investing, but the accelerating spending programme means future cash generation will remain an important focus.

The AI division’s $431 million operating profit was a positive milestone, although it remained far below the $16.4 billion invested in the business during the quarter.

Investors will therefore be watching whether revenue and operating income can continue rising quickly enough to prevent SpaceX from becoming increasingly dependent on debt or additional share issuance.

Starlink Remains SpaceX’s Main Profit Engine

Although AI became SpaceX’s largest division by revenue, Starlink’s connectivity business remained its biggest source of operating profit.

Connectivity revenue increased 69% year over year to $5.2 billion. Operating income reached approximately $2.4 billion, producing a margin of about 46%.

Starlink added approximately 1.6 million consumer subscribers during the quarter, lifting its total to 13.6 million.

The division includes residential satellite internet, commercial services, aviation and maritime connectivity, direct-to-device technology and government contracts.

Musk said Starlink could eventually generate several hundred billion dollars in annual revenue. SpaceX is also working toward becoming a broader mobile-network operator that could compete more directly with AT&T, Verizon and T-Mobile.

The company’s combination of satellites, terrestrial networks and direct-to-device connectivity could allow it to reach customers in areas that remain underserved by conventional telecommunications infrastructure.

Rocket Business Posts a Small Operating Loss

SpaceX’s original space-launch business produced $1.8 billion in third-quarter revenue, representing growth of approximately 6% from a year earlier.

However, the division recorded an operating loss of approximately $7 million. Launch timing, Starship development expenses and investment in reusable rocket infrastructure continued to affect profitability.

Musk said SpaceX plans to attempt the recovery of both the Starship vehicle and its Super Heavy booster during an upcoming test. Achieving full reusability is central to reducing launch costs and supporting NASA lunar missions, Mars ambitions and possible future space-based data centres.

The space division now represents a relatively small portion of consolidated revenue, but its technology remains strategically important to the Starlink and AI businesses. Lower launch costs allow SpaceX to deploy satellites and potentially orbital computing equipment without relying on outside launch providers.

Tesla and SpaceX Are Discussing a Potential Merger

The earnings call also produced another major development: Tesla and SpaceX have formed special committees of independent directors to examine a potential merger.

Musk said there could be strategic value in combining the companies as their AI, robotics, manufacturing, energy and computing operations increasingly overlap. However, he cautioned that investors should not assume a transaction will occur.

No valuation, exchange ratio or timetable has been agreed. Musk is not expected to participate directly in either committee’s evaluation, and any transaction would require approval from shareholders and regulators.

A combined company could bring together:

• SpaceX’s rockets, satellites and AI data centres
• Starlink’s global communications network
• Tesla’s electric vehicles and battery technology
• Tesla’s Robotaxi and Optimus programmes
• Grok and related AI services
• Energy generation and storage infrastructure

However, a transaction involving two companies with enormous valuations and the same controlling figure would face significant questions concerning governance, valuation, conflicts of interest and regulatory oversight.

Tesla is scheduled to publish its own third-quarter results after the market closes on October 21. Any comments regarding the potential combination could trigger further volatility in both stocks.

Why SpaceX Stock Jumped

The 7.5% rally reflected more than a conventional earnings beat.

Investors received evidence that SpaceX’s AI infrastructure is generating meaningful revenue, that the Super Intelligence division has reached operating profitability and that Starlink continues to produce strong cash flow.

The principal bullish factors included:

• Revenue exceeding expectations by approximately $1.7 billion
• A return to quarterly profitability
• AI revenue becoming the company’s largest sales category
• Stronger-than-expected adjusted EBITDA
• Continued Starlink subscriber growth
• Aggressive AI capacity and revenue targets
• The possibility of a future Tesla merger

The results also lifted other AI-related companies. Nvidia, Intel, Tesla, CoreWeave and Nebius shares moved higher after the report as investors interpreted SpaceX’s expansion plans as evidence that demand for AI chips, data centres and power infrastructure remains strong.

What Comes Next for SpaceX Stock?

SpaceX delivered a substantially stronger quarter than Wall Street expected, but the company’s valuation still depends on ambitious growth assumptions.

The immediate outlook will be shaped by the speed of its data-centre expansion, the profitability of the AI division and Starlink’s ability to maintain subscriber and margin growth. Investors will also monitor whether the proposed $35 billion to $40 billion of fourth-quarter infrastructure spending places new pressure on cash flow.

A successful Starship recovery could provide another catalyst by strengthening the case for lower launch costs and fully reusable heavy rockets.

The potential Tesla merger adds another source of volatility. A combination could create one of the world’s largest integrated technology groups, but its structure, governance and valuation would be exceptionally complicated.

For now, the third-quarter report has answered one of the market’s biggest questions: SpaceX’s AI investments are beginning to generate both rapid revenue growth and operating profit. The next test will be whether the company can maintain that momentum while undertaking one of the largest infrastructure expansion programmes in corporate history.

Trade selected stock CFDs around the clock and take positions on rising or falling prices. Eligible new clients can unlock up to $5,000 in combined rewards. Explore available instruments and start trading with Markets.com.