SpaceX jumps on earnings beat as Musk calls Tesla merger a good idea

What happened

SpaceX told investors on Tuesday that third-quarter sales jumped 161% from a year earlier to $14.6 billion, ahead of the roughly $12.7 billion analysts expected, per LSEG data cited by CNBC. Net income reached $4.4 billion, against a loss of about $1.1 billion a year before. Finimize noted the company topped expectations in every division. On the call, Musk said both boards have set up special committees of independent directors to study a tie-up with Tesla, though no terms are agreed. The Financial Times (FT) said shareholders and regulators worldwide would need convincing. Tesla reports its results after Wednesday's close.

What it means

Artificial intelligence drove the quarter. SpaceX now groups its AI work, including renting out data-center computing capacity, under a unit it calls Super Intelligence. That segment brought in about $7.6 billion, up from $813 million a year earlier, and turned an operating profit of $431 million after a $1.7 billion loss, the company's filing showed. Cursor, which SpaceX bought in August, added $608 million of revenue. Starlink, the satellite internet arm, grew sales 69% to $5.2 billion. SpaceX, which listed on the Nasdaq in June, now earns more from AI than from Starlink.

That growth is expensive. SpaceX spent about $19.6 billion on capital expenditure, meaning money for equipment and buildings, in the quarter, and roughly $16.4 billion of it went to AI, CoinDesk reported. Over nine months, capex reached $48.1 billion against $13.1 billion of cash generated by operations. Analysts at Truist argued the results support the case for AI cloud providers, since SpaceX said it could rent its capacity several times over. Other space names, including Rocket Lab, Intuitive Machines and AST SpaceMobile, also climbed.

The merger talk adds a second layer. Musk owns about 36% of SpaceX outright, or 48.4% with restricted shares and options, and about 19.8% of Tesla, CoinDesk said, citing a June filing. Because he sits on both sides, he is kept out of the committee talks. He pointed to shared work on AI software, chip design and robotics, and the two firms are already building a chip plant in Texas with Intel. A deal would also pool 30,221 bitcoin held by the pair. For Tesla, Musk said approval would need a 50% vote of all shares, which he called a high bar.

Tesla's own numbers come next. Analysts polled by LSEG expect revenue near $27.9 billion and earnings of 43 cents a share, though CoinDesk cited slightly higher forecasts. Third-quarter deliveries were about 2% below last year, and the stock is down 14% in 2026. Investors will watch whether Tesla's management adds anything to Musk's comments on a combination.

The bull case

Supporters can point to a company that moved from a heavy loss to a large profit in a year, with AI sales now larger than Starlink's and every division beating expectations. If demand for computing capacity holds, SpaceX could fund more of its building spree from its own cash, and closer ties with Tesla might cut duplicated spending on chips and AI.

The bear case

Skeptics see a business spending far more than it brings in from operations, betting heavily that AI demand stays strong. A merger raises governance questions, since one person holds large stakes on both sides, and the FT said regulators and shareholders would need convincing. Tesla's softer deliveries and its results tonight could also shift the mood, and no deal terms exist yet.