SpaceX stock rises as Elon Musk announces stunning profit and revenue growth

Shares of Space Exploration Technologies Corp., Elon Musk’s rocket developer and artificial intelligence company, rose more than 8% in late trading today after reporting earnings results that showed strong momentum in its AI business.

The company, better known as SpaceX, reported third-quarter profit before certain costs such as stock compensation of 45 cents per share, beating Wall Street’s forecast of 13 cents, while revenue rose 161% year-over-year to $14.6 billion, easily topping its $12.72 billion target. This helped SpaceX achieve its first-ever profit: net income was $4.4 billion, offsetting a loss of $1.1 billion in the same period last year.

SpaceX also reported an operating profit of $2.8 billion, compared to a loss of $273 million a year ago. Adjusted earnings before interest, taxes, depreciation and amortization were $8.8 billion, up 306%, while the company’s diluted earnings per share were 35 cents, compared with a loss of 36 cents last year.

The company livestreamed its earnings announcement on its social media platform. The livestream began dramatically with a video recap of Starship’s final flight and orchestral music in the background.

What followed was a simulation of the company’s next upcoming flight, in which it will use a giant mechanical arm to try to grab both the launcher and the actual ship. The company has promised that it will be a “profound technological milestone in the history of civilization and consciousness.”

The livestream then switched to a cinematic view of SpaceX’s products before focusing on the three executives sitting at a table in a room at the company’s Starlink factory in Bastrop, Texas.

“To understand the nature of the universe and all of these fundamental questions, we need to expand the scope of consciousness,” Musk said in a recording played against a video backdrop of space and the moon. The event looked more like the opening of a sci-fi movie than a corporate earnings report.

Financial and operating results for the third quarter of 2026

— SpaceX (@SpaceX) October 20, 2026

With the dramatic images out of the way, Musk got down to business and quickly caused a stir when he stressed that he thought a merger between SpaceX and Tesla Inc., his electric vehicle company, was a “good idea.” He revealed that the boards of directors of both companies have set up a special committee to examine the feasibility of a merger.

SpaceX is best known for its rocket-powered space transportation capabilities, but by far its most profitable business is Starlink, its satellite-based internet connectivity division. So those were some of the more interesting numbers that investors wanted to hear about. And what Musk said certainly pleased them when he revealed that Starlink’s subscriber base had grown to 13.6 million at the end of the quarter, up from 12 million in the previous period.

Meanwhile, Starlink’s total connectivity revenue rose to $5.25 billion in the quarter, up 69% from $3.1 billion a year ago and above the Street forecast of $4.84 billion. Starlink’s consumer sales were $3.12 billion, while corporate and government customers contributed $2.13 billion to total sales.

SpaceX has also become an AI company since acquiring xAI earlier this year. xAI is Musk’s AI startup, developer of the chatbot Grok and owner of the social media platform X. XAI is now the company’s largest division. Revenue rose to $7.56 billion in the quarter, compared to just $813 million a year ago. Wall Street analysts had only expected sales of $6.47 billion there. The business will likely continue to grow larger in the future, as SpaceX completed its $60 billion acquisition of AI programming startup Cursor during the quarter.

The health of SpaceX’s AI business sparked a surge in shares of companies like Nvidia Corp. and Intel Corp. which rose 2% and 3%, respectively, and neocloud providers such as CoreWeave Inc. and Nebius Group NV, which rose 5% and 6%, respectively.

“It seems like Elon Musk is unstoppable right now as all of SpaceX’s main business units are growing,” said Holger Mueller of Constellation Research. “Starlink is growing quickly and xAI, which was once a bit of a concern, is also doing very well. Buying Cursor was a smart move because AI has changed developers’ lives. In fact, of all AI workloads, developer workloads are the easiest to scale, and that’s exactly what xAI will do now.”

In the video, Musk outlined some ambitious goals for increasing the company’s data center capacity, saying he wants to increase it to 20 gigawatts by the end of 2027, up from just 1.7 gigawatts today. Although many investors have expressed concerns about the sustainability of computing demand, SpaceX’s numbers and plans suggest that Musk doesn’t feel the same way. On the contrary, Musk said SpaceX has been “hounded relentlessly by every hyperscaler and dozens of smaller companies to rent more of our computing power.”

Musk also said that computing prices have risen to the point where the company can generate a return on its data center investments within 12 months, and he believes that window could shorten to just six months by this time next year. However, such a repayment will be necessary as the company has expressed ambitious ambitions to increase its capital expenditure next year. SpaceX plans to spend between $35 billion and $40 billion on data center infrastructure in the current quarter, up from $19.6 billion in the previous quarter.

Johnson adopted the forecast and said the company is on track to reach $100 billion in annual recurring revenue by year-end. That number could rise to $500 trillion to $1 trillion by the end of 2027, he said, thanks in part to increasing adoption of the company’s Grok chatbot.

For the fourth quarter of fiscal 2027, SpaceX is targeting revenue between $33 billion and $37 billion, well above the Street estimate of $22 billion.

Photo: SpaceX