SpaceX shares climbed 10% on Wednesday after the company reported a sharp increase in third-quarter revenue, supported by expanding satellite connectivity services and rapid growth in artificial intelligence infrastructure. The results also drew attention to a potential combination with Tesla, as CEO Elon Musk revealed that both companies had established committees to explore a merger.
The latest financial performance highlights SpaceX’s growing position across multiple technology markets, from satellite communications to AI computing. Investors responded positively to the results, while shares of several other space-related companies also advanced during Wednesday’s trading session.
Revenue Growth Exceeds Expectations
SpaceX generated $14.6 billion in revenue during the third quarter, representing a 161% increase from the same period a year earlier. The figure exceeded the $12.72 billion consensus estimate compiled by LSEG analysts.
Operating income reached $2.8 billion, while net income totaled $4.4 billion. The company had reported a net loss of $1.05 billion in the corresponding quarter of the previous year.
The results follow SpaceX’s June Nasdaq debut, which marked the largest initial public offering in history. The latest earnings report provides investors with further insight into the company’s financial performance following its entry into public markets.
Chief Financial Officer Bret Johnsen attributed the strong quarter to continued growth in connectivity revenue and a significant acceleration in the company’s Super Intelligence, or SI, business.
Starlink and AI Drive Expansion
SpaceX’s satellite internet service, Starlink, remains an important source of recurring revenue. At the same time, the company’s expanding investment in AI infrastructure has become a major contributor to its growth.
Revenue from the SI business increased more than ninefold to $7.56 billion, compared with $813 million in the same quarter last year. The segment has become SpaceX’s largest business unit, reflecting the company’s expanding ambitions in artificial intelligence.
The combination of established connectivity operations and rapidly growing AI infrastructure gives SpaceX exposure to two areas of technology spending. Its latest results suggest that demand across these businesses is contributing significantly to overall revenue growth.
Musk Considers a SpaceX and Tesla Combination
During the earnings call, Musk said he sees potential advantages in combining SpaceX with Tesla. The proposal could lead to what would be the largest merger in history, although the companies have not announced a completed transaction.
According to Musk, the boards of both companies have established dedicated committees to examine the possibility of a consolidation. He argued that closer cooperation could create substantial benefits as artificial intelligence capabilities advance.
Tesla was scheduled to report its third-quarter financial results after the market closed on Wednesday. Investors will be watching for any additional information about the company’s outlook and whether the potential combination receives further consideration.
SpaceX Raises Its Revenue Outlook
SpaceX projected first-quarter 2027 revenue of between $33 billion and $37 billion, significantly exceeding the average analyst estimate of $22.2 billion compiled by LSEG.
The forecast points to continued expansion and reinforces expectations that the company will remain a major participant in the growing market for AI computing capacity.
The scale of the projected revenue has also attracted attention from analysts assessing the economics of AI cloud providers. Truist Securities analysts said SpaceX’s results offered an early indication that strong demand could support pricing power and shorter investment payback periods across the sector.
AI Computing Demand Supports Cloud Providers
Analysts at Truist Securities described SpaceX’s third-quarter results as an encouraging data point for investors evaluating the business models of AI cloud infrastructure providers. Their assessment comes amid recent concerns about the debt financing and borrowing costs associated with the industry’s rapid expansion.
SpaceX reportedly indicated that demand for its available computing capacity was strong enough that it could rent the capacity several times over. Analysts believe this level of demand could benefit providers such as CoreWeave and Nebius, particularly if stronger pricing offsets higher financing expenses.
Market performance among related companies was mixed on Wednesday. Nebius and CoreWeave shares traded slightly lower, while IREN and Applied Digital moved higher in early trading. Shares of other space companies, including Rocket Lab, Intuitive Machines and AST SpaceMobile, also advanced.
What Investors Will Watch Next
SpaceX’s latest results highlight the company’s growing role in AI infrastructure and satellite connectivity, while its revenue forecast points to expectations for further expansion. The potential Tesla merger adds another significant development for investors assessing Musk’s broader technology businesses.
Future performance will depend on the company’s ability to sustain demand, expand its computing infrastructure and convert investment into continued financial growth. Investors will also be watching for further details on the proposed merger and how competition, financing costs and infrastructure requirements affect the wider AI cloud market.
