President Donald Trump asked Elon Musk to ease restrictions he had imposed on the military-grade version of SpaceX's Starlink system in Ukraine, The Wall Street Journal reported Thursday, citing U.S. officials.
The Starshield system, which Ukraine depends on in its war against Russia, was "working more normally Thursday, shortly after" Trump spoke to Musk by phone, U.S. and Ukrainian officials told the Journal.
The newspaper reported Tuesday that Musk, the founder and CEO of SpaceX and a critic of Ukrainian President Volodymyr Zelenskyy, had ordered the Starlink slowdown.
Two unnamed sources in that report said Trump and Musk had discussed the decision to throttle Starlink "soon after" the change first became public last week, while one source said Musk had spoken to Trump prior to imposing the speed cap.
Trump has repeatedly denied involvement in the decision and said he does not know if Musk was behind it.
"I don't know who did it, but I was not involved," Trump said Wednesday.
The Starlink controversy, which drew bipartisan concern and criticism from lawmakers, emerged as Trump has ramped up criticism of Zelenskyy for continuing to target Russian energy infrastructure. At the same time, Trump has pursued a deal to ease sanctions on Russia so it can supply some diesel on the global market.
Sen. John Cornyn, R-Texas, told CNBC's "Squawk Box" on Wednesday that he does not believe Musk would throttle Starlink without "at least the acquiescence of the White House."
Sen. Richard Blumenthal, D-Conn., the ranking member of the Senate homeland security committee's investigations subcommittee, on Thursday launched an inquiry into how SpaceX's satellite tech was "degraded for Ukraine without notice."
"This decision to limit critical technology for a key ally not only put Ukrainian forces at risk and their people in peril, but raises serious questions about who controls critical capabilities the U.S. government has spent billions of dollars to procure," Blumenthal said in letters to Musk and Defense Secretary Pete Hegseth.
The White House and an email associated with Musk did not immediately respond to CNBC's requests for comment on Thursday's report that Trump had asked Musk to lift the restrictions.
This is developing news. Please check back for updates.
During Space Exploration Technologies' (SPCX -7.75%) third-quarter earnings call, Elon Musk laid out an ambitious plan to reach a $1 trillion annualized revenue run rate by December 2027.
That might sound like fantasy, considering SpaceX generated less than $19 billion in total revenue last year. But as the company evolves from a rocket manufacturer and satellite internet provider into one of the world's fastest-growing artificial intelligence (AI) infrastructure businesses, there's a compelling case for taking Musk's prediction seriously.
Let's dive into what SpaceX needs to do to reach Musk's trillion-dollar revenue target and assess if now is a good time to buy the stock.
Image source: Getty Images.
SpaceX is becoming an artificial intelligence (AI) powerhouse
For most of its history, SpaceX was known for its Starlink internet connectivity business and Falcon and Starship rocket launch business. However, the company's combination with xAI and Cursor has dramatically changed its growth trajectory.
During the quarter, SpaceX generated $14.6 billion in total revenue, representing 161% year-over-year growth. Its Super Intelligence (SI) division grew 830% year over year to $7.6 billion. Artificial intelligence (AI) now accounts for 52% of SpaceX's total sales.
Musk seems to think this growth is just getting started. During the earnings call, he revealed that SpaceX expanded its AI computing capacity to 1.7 GW, up from 0.6 GW a year earlier. He expects capacity to reach between 2.5 and 3 gigawatts by December, and says he's "fairly confident" the company can add an incremental 10 gigawatts during 2027.
If this is achieved, it would bring SpaceX to 13 gigawatts by the end of next year. Musk also says the company has a more ambitious plan to bring on an incremental 20 gigawatts next year.
This infrastructure build-out is the foundation of Musk's trillion-dollar goal. A $1 trillion annualized revenue run rate means SpaceX would generate $250 billion in quarterly revenue by the end of 2027. In other words, it does not mean the company would actually report $1 trillion in revenue for the full year.
Space Exploration Technologies CEO Elon Musk. Image source: The White House.
Wall Street expects the hyperscalers to keep spending
One reason Musk's prediction deserves consideration is his track record of rapidly building AI infrastructure. In 2024, xAI built its Colossus I supercomputer in just 122 days. That execution speed could be an enormous competitive advantage as AI hyperscalers scramble to secure additional compute.
According to Citi, Amazon, Microsoft, Alphabet, and Meta Platforms are projected to spend a combined $5.35 trillion on capital expenditures (capex) through 2030. Much of this investment will go toward data centers, semiconductors, networking equipment, and power infrastructure.
Importantly, investors should understand that SpaceX has already benefited from leasing AI capacity through its relationships with Google Cloud, Anthropic, and Reflection AI, complemented by a growing portfolio of advertising and software products from Grok and Cursor.
SPCX Space Exploration Technologies$146.97-$12.34 (-7.75%)
NASDAQ · As of 1:35 PM ET 10/22/26
Reaching a $1 trillion revenue run rate is a steep hill to climb
The biggest question surrounding Musk's forecast isn't simply whether SpaceX can build enough AI infrastructure. It really boils down to whether the company can actually generate enough revenue from its infrastructure to justify his prediction.
Let's consider a scenario in which AI accounts for 90% of SpaceX's revenue by December 2027, with Starlink and Space contributing the remaining 10%. That would mean $900 billion in annualized revenue is attached to AI services, alongside $100 billion from its other businesses.
Here's where AI capacity becomes the important variable in the equation. As referenced, SpaceX generated $7.6 billion in AI revenue during the third quarter. This equates to about $30 billion annually. With 1.7 gigawatts of installed capacity, that implies $18 billion in annualized revenue per gigawatt.
Suppose SpaceX reaches 15 gigawatts by December 2027. To generate $900 billion annually from AI, the revenue productivity from capacity agreements would need to increase to nearly $60 billion per gigawatt -- more than triple today's level.
There are reasons why AI revenue productivity should improve throughout next year. Nvidia's next-generation Vera Rubin compute architecture is expected to deliver higher performance, while growing demand for AI inference should help SpaceX monetize its infrastructure more efficiently. Moreover, software subscriptions from Grok and Cursor could also contribute to the segment's overall growth.
Where things get a little messy is that, even under this AI-heavy scenario, Starlink and Space would also need to triple their current combined revenue pace. This means Musk's $1 trillion target requires much more than data center expansion. SpaceX would essentially need exceptional execution, stronger monetization, and sustained customer demand across all facets of the business.
At a high level, the long-term investment thesis around SpaceX is becoming more compelling. The company increasingly resembles a hyperscaler, an AI neocloud provider, a satellite connectivity company, and a space transportation business.
Even if Musk's forecast proves overly optimistic, SpaceX is demonstrating the ability to capitalize on several enormous market opportunities simultaneously. For this reason, SpaceX stock may be worth a consideration for investors looking for a new spin on the AI trade.
Key Takeaways SpaceX's Q3 revenue jumped 161%, beating estimates on AI growth.AI and Starlink are driving SpaceX's growth and profitability.SpaceX's upbeat 2027 outlook puts SpaceX-focused ETFs in focus.
SpaceX (SPCX - Free Report) shares climbed about 8% on Wednesday after the company reported stronger-than-expected third-quarter results, thanks to rapid growth in its artificial intelligence (AI) business and satellite internet operations. Revenue jumped 161% year over year, comfortably beating Wall Street estimates
CEO Elon Musk also weighed in on a potential merger between SpaceX and Tesla (TSLA), calling the idea attractive while emphasizing that a deal is far from certain, as quoted on CNBC.
SpaceX Beats Revenue and Earnings EstimatesSpaceX reported third-quarter revenue of $14.58 billion, exceeding the Zacks Consensus Estimate of $12.59 billion. Adjusted earnings per share came in at 45 cents, compared with the Zacks Consensus Estimate of 11 cents. The company posted operating income of $2.8 billion and net income of $4.4 billion, reversing a net loss of $1.05 billion in the year-ago quarter.
Adjusted EBITDA reached $8.81 billion, well above the $6.59 billion estimate, as quoted on CNBC. Meanwhile, capital expenditures totaled $19.59 billion, including $16.44 billion spent on AI infrastructure. The strong results reflect SpaceX's expanding presence beyond its traditional rocket-launching business, particularly in AI computing and satellite connectivity.
AI Business Emerges as a Major Growth DriverSpaceX's AI division, which the company refers to as “Super Intelligence,” has rapidly become its largest business by revenue. Sales in the segment surged ninefold to $7.56 billion in Q3 from $813 million a year earlier, beating the $6.47 billion analyst estimate, as mentioned on CNBC.
The business also turned profitable in Q3. SpaceX has been expanding its AI computing operations by providing infrastructure and cloud capacity to customers, including Google (GOOGL - Free Report) and Anthropic.
SpaceX said it added $6.7 billion in incremental year-over-year revenue from its Super Intelligence business and related infrastructure. Cloud contracts, solid acquisitions and demand for its Grok AI models and software applications led to the gains (read: Space Meets AI: SpaceX's Cursor Deal Puts These ETFs in Focus).
Starlink Continues to Be Key Growth DriverDespite the rapid expansion of AI, SpaceX's connectivity business remains a major contributor to profitability. The segment includes Starlink, the company's satellite internet service, alongside government and enterprise connectivity offerings.
Connectivity revenue increased 69% year over year to $5.25 billion, surpassing the $4.84 billion analyst estimate, as quoted on CNBC. SpaceX is also exploring opportunities to enter the U.S. mobile market.
Its recent spectrum acquisition plans and regulatory approval for a proposed 15,000-satellite constellation could support its broader connectivity ambitions (read: Telecom Stocks Tumble After SpaceX Spectrum Deal: ETFs in Focus).
SpaceX Projects a Significant Revenue Jump in 2027SpaceX also provided an upbeat outlook for the coming quarters. CFO Bret Johnsen projected first-quarter 2027 revenue of $33 billion to $37 billion, well above the average analyst estimate of $22.2 billion, according to LSEG, as quoted on CNBC.
Musk also said SpaceX could achieve annual recurring revenue of $500 billion to $1 trillion by the end of 2027. That ambitious target is considerably higher than analysts' approximately $110 billion forecast for SpaceX's full-year 2027 revenue, according to LSEG, as mentioned on the same CNBC article.
Upbeat Analysts’ View JPMorgan raised its price target for SpaceX to $500 from $240 following the company's better-than-expected Q3 results, as reported by INDmoney. The stock closed at $159.31 per share on Oct. 21, 2026. SpaceX has a Zacks Rank #2 (Buy).
ETFs in Focus Against this backdrop, below we highlight a few exchange-traded funds (ETFs) with significant exposure to SpaceX that investors may consider.
Baron First Principles ETF (RONB - Free Report) , Roundhill Space & Technology ETF (MARS - Free Report) , VanEck Space ETF (WARP - Free Report) , VanEck Space ETF (ORBX - Free Report) , VegaShares SpaceX & Beyond Earth ETF (XSPC - Free Report) and WisdomTree Space Economy Fund (WSPC - Free Report) are the ETFs thatinvest in SpaceX to a significant extent.
Major leveraged SpaceX ETFs include the Direxion Daily SpaceX Bull & Bear 2X ETF (LOFF - Free Report) , ProShares Ultra SpaceX (SPCF - Free Report) , and T-REX 2X Long SpaceX Daily Target ETF (SPAX - Free Report) .
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Since going public in June, Space Exploration Technologies' (SPCX -7.54%) stock has been volatile.
Investors are grappling with the company's $2 trillion valuation and its ambitious agenda, ranging from providing most of the planet's wireless internet one day to launching data centers into space to building a massive Terafab facility.
There are lots of unknowns, but here's what an $8,000 investment in SpaceX could be worth in 2030.
Image source: The Motley Fool.
Analysts see massive growth ahead Stocks are typically valued on multiples of their earnings, revenue, and earnings before interest, taxes, depreciation, and amortization (EBITDA). Companies growing these metrics faster will earn higher multiples. Part of the reason SpaceX has received a $2 trillion valuation is that investors believe the company will grow quickly, and to some extent it already has.
For instance, Wall Street analysts project revenue to more than double to over $45.6 billion by year-end, while adjusted EBITDA is expected to also more than double to over $23 billion, according to S&P Global Market Intelligence.
Assuming that happens, SpaceX's current market cap values the company at 44 times 2026 forward revenue and 87 times forward EBITDA. If we look at analyst estimates in 2030, revenue is projected to absolutely soar to over $492.5 billion, while adjusted EBITDA would surge to over $357 billion.
The 2030 revenue projection is the average among 20 analysts, with a pretty large disparity in estimates. The low estimate is roughly $219 billion, while the high estimate is over $708 billion.
There are also 20 estimates for adjusted EBITDA, ranging from roughly $99 billion to $576.5 billion. If you were to apply the same multiples SpaceX trades at today to these forward estimates, the company would be valued at $21.6 trillion based on revenue and nearly $31 trillion based on adjusted EBITDA.
Typically, as companies get much bigger and their markets become more saturated, their multiples decline. However, if SpaceX grows like this, where revenue and adjusted EBITDA are growing by 10- and 15-fold, who knows what the stock's multiples would be?
If we assume multiples get cut in half, the stock would be valued anywhere from $10.8 trillion on revenue to $15.5 trillion on adjusted EBITDA. If we go with this more conservative approach right now, an $8,000 investment in SpaceX would be worth between $43,200 and $62,000, generating spectacular returns.
A valuation exercise is largely theoretical Assigning a multiple to a stock is done on an imperfect basis, and it's even more difficult when we are largely in uncharted territory. SpaceX is an ultra-fast-growing stock already garnering a multitrillion-dollar valuation. The market is naturally going to be skeptical.
But what's even more important is examining the underlying assumptions that drive revenue and EBITDA to see whether they make sense.
We don't know exactly what's behind each analyst's assumptions, but if they are giving SpaceX credit for launching data centers into space or completing activities with SpaceX's super-heavy-lift, fully reusable rocket, Starship, there is a lot that could go wrong.
Starship is still in testing, and things like data centers in space are still by no means a guarantee, as are many of SpaceX's ambitions. Just looking at this year alone, analysts think revenue will jump from $7.8 billion in the second quarter to over $20 billion by the fourth quarter.
Also, after each quarter, analyst projections can change significantly as they incorporate new information into their models.
Additionally, for SpaceX to achieve everything it wants to, it will incur significant capital expenditures, likely requiring the company to take on substantial debt and issue equity, which would dilute existing shareholders.
On average, analysts project that SpaceX will have close to $1 trillion in capex, including the full years of 2026 through 2030, and generate tens of billions of dollars in negative adjusted free cash flow.
It's hard to know where all this funding might come from, or whether it's even possible.
The risk factor In theory, an investment in SpaceX could generate phenomenal shareholder gains. But it depends on many assumptions that may not materialize and on goals that may not be met, so I still view the stock as a very risky investment right now.
Bloomberg's Ed Ludlow breaks down Meta's plans to boost AI spending and release new Class C shares to ensure CEO Mark Zuckerberg stays in California if a wealth tax is passed. Plus, Tesla reported strong profit, but a big cut to its spending plans is raising questions about Elon Musk's AI, robotaxi and robotics goals for the company as it weighs a potential merger with SpaceX.
SpaceX (NASDAQ:SPCX – Get Free Report)‘s stock had its “buy” rating reaffirmed by equities research analysts at Needham & Company LLC in a report issued on Wednesday, Benzinga reports. They currently have a $250.00 target price on the stock. Needham & Company LLC‘s target price points to a potential upside of 56.93% from the stock’s previous close.
A number of other research firms have also recently commented on SPCX. Pivotal Research reissued a “buy” rating and issued a $230.00 target price on shares of SpaceX in a research note on Monday, October 12th. Seaport Research Partners cut SpaceX from a “buy” rating to a “neutral” rating in a research note on Friday, August 7th. William Blair reissued an “outperform” rating on shares of SpaceX in a research note on Friday, October 9th. Deutsche Bank Aktiengesellschaft reissued a “buy” rating and issued a $235.00 target price on shares of SpaceX in a research note on Monday, September 28th. Finally, Stifel Nicolaus started coverage on SpaceX in a research note on Tuesday, July 7th. They issued a “buy” rating and a $190.00 target price on the stock. Three analysts have rated the stock with a Strong Buy rating, thirty have given a Buy rating, nine have assigned a Hold rating and four have issued a Sell rating to the stock. According to MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and a consensus target price of $244.19.
View Our Latest Stock Report on SPCX
SpaceX Trading Up 7.8% Shares of SpaceX stock opened at $159.31 on Wednesday. SpaceX has a 12 month low of $104.83 and a 12 month high of $225.64. The stock has a market capitalization of $2.10 trillion and a price-to-earnings ratio of -1,770.11. The firm’s fifty day moving average price is $149.18. The company has a debt-to-equity ratio of 0.29, a current ratio of 5.12 and a quick ratio of 4.99. SpaceX (NASDAQ:SPCX – Get Free Report) last released its earnings results on Tuesday, October 20th. The company reported $0.35 EPS for the quarter, topping analysts’ consensus estimates of $0.10 by $0.25. The company had revenue of $14.58 billion during the quarter. During the same quarter in the prior year, the company posted ($0.36) earnings per share. The company’s revenue was up 161.4% on a year-over-year basis. Analysts predict that SpaceX will post 0.07 earnings per share for the current year.
Insider Activity at SpaceX In related news, COO Gwynne Shotwell sold 342,170 shares of the stock in a transaction on Tuesday, September 22nd. The stock was sold at an average price of $153.57, for a total transaction of $52,547,046.90. Following the sale, the chief operating officer directly owned 2,472,035 shares of the company’s stock, valued at $379,630,414.95. This trade represents a 12.16% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.
Institutional Investors Weigh In On SpaceX Institutional investors have recently modified their holdings of the business. Syntax Research Inc. purchased a new position in SpaceX in the second quarter worth about $26,000. Atwood & Palmer Inc. purchased a new position in SpaceX in the second quarter worth about $29,000. PayPay Securities Corp purchased a new position in SpaceX in the second quarter worth about $30,000. Marquette Asset Management LLC purchased a new position in SpaceX in the second quarter worth about $32,000. Finally, Hickory Point Bank & Trust purchased a new position in SpaceX in the third quarter worth about $30,000.
Key Headlines Impacting SpaceX Here are the key news stories impacting SpaceX this week:
Positive Sentiment: Q3 results substantially exceeded expectations. SpaceX reported $0.35 in adjusted EPS versus a $0.10 consensus estimate, while revenue rose 161% year over year to approximately $14.58 billion. The company also swung from a year-earlier loss to roughly $4.4 billion in net income. SpaceX quarterly revenue jumps, beats estimates as AI business surges Positive Sentiment: AI infrastructure has become the primary growth catalyst. The Super Intelligence division generated about $7.56 billion in quarterly revenue, up sharply from the prior year, and posted an operating profit. Management said deployed computing capacity reached 1.7 gigawatts and indicated that new installations can pay back in less than a year at current pricing. Why SpaceX Stock Popped After Earnings Positive Sentiment: Forward guidance and analyst sentiment improved. SpaceX projected first-quarter 2027 revenue of $33 billion to $37 billion, supported by a roughly $63 billion backlog. JPMorgan raised its price target from $240 to $500, while Wells Fargo, TD Cowen and Needham also lifted targets or maintained bullish ratings. JPMorgan says SpaceX will triple after huge third-quarter earnings beat Positive Sentiment: Starlink continues to provide recurring cash flow. Connectivity revenue reached about $5.25 billion, with consumer subscribers growing to 13.6 million. Investors also welcomed Musk’s comments about expanding AI capacity and the possibility of broader Starlink mobile services. Neutral Sentiment: A potential Tesla (TSLA) merger is being explored, but remains uncertain. Independent committees at both companies are reviewing a combination that could create technology and AI synergies. However, shareholder approval, valuation, regulatory issues and Tesla’s China operations could complicate any transaction. SpaceX and Tesla boards form special committees to review merger Negative Sentiment: Investors remain concerned about enormous capital requirements. Third-quarter capital expenditures were approximately $19.6 billion, and management expects $35 billion to $40 billion in fourth-quarter spending. Analysts warn that continued AI and satellite investment could produce substantial cash burn, debt needs and execution risk. Negative Sentiment: Insider share-sale eligibility may add supply pressure. Reports indicate that approximately 911.5 million shares held by select insiders became eligible for sale, potentially increasing volatility and limiting near-term upside. SpaceX is set to make dubious history yet again SpaceX Company Profile (Get Free Report)
Space Exploration Technologies Corp., commonly known as SpaceX, is a privately held aerospace company founded in 2002 by Elon Musk. The company develops and operates launch vehicles and spacecraft designed to reduce the cost of access to space and support commercial, government and scientific missions.
SpaceX’s principal products and services include the Falcon 9 and Falcon Heavy rockets, the Dragon spacecraft and the Starlink satellite communications network. Falcon rockets are used to launch satellites, cargo and crew, while Dragon spacecraft support transportation to and from low Earth orbit.
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Arcataur Capital Management LLC purchased a new position in shares of SpaceX (NASDAQ:SPCX – Free Report) during the 3rd quarter, according to its most recent filing with the Securities and Exchange Commission. The firm purchased 3,396 shares of the company’s stock, valued at approximately $512,000.
A number of other institutional investors and hedge funds have also recently bought and sold shares of SPCX. Syntax Research Inc. acquired a new position in SpaceX in the second quarter valued at $26,000. Atwood & Palmer Inc. purchased a new position in shares of SpaceX during the second quarter worth about $29,000. PayPay Securities Corp purchased a new stake in SpaceX in the second quarter valued at approximately $30,000. Hickory Point Bank & Trust acquired a new stake in shares of SpaceX in the third quarter valued at approximately $30,000. Finally, Maryland Capital Advisors Inc. acquired a new stake in shares of SpaceX in the third quarter valued at approximately $30,000.
SpaceX Trading Up 7.8% NASDAQ SPCX opened at $159.31 on Thursday. The firm has a market cap of $2.10 trillion and a PE ratio of -1,770.11. The stock’s 50 day simple moving average is $149.18. SpaceX has a 12-month low of $104.83 and a 12-month high of $225.64. The company has a debt-to-equity ratio of 0.29, a current ratio of 5.12 and a quick ratio of 4.99.
SpaceX (NASDAQ:SPCX – Get Free Report) last posted its quarterly earnings results on Tuesday, October 20th. The company reported $0.35 EPS for the quarter, beating the consensus estimate of $0.10 by $0.25. The business had revenue of $14.57 billion during the quarter. During the same period in the prior year, the company earned ($0.36) earnings per share. SpaceX’s revenue for the quarter was up 161.4% on a year-over-year basis. Equities analysts forecast that SpaceX will post 0.07 earnings per share for the current fiscal year. SpaceX News Summary Here are the key news stories impacting SpaceX this week:
Positive Sentiment: Strong Q3 results: SpaceX reported $14.58 billion in revenue, up 161% year over year, and earnings of $0.35 per share versus the $0.10 consensus estimate. Net income reached approximately $4.4 billion, compared with a loss a year earlier. SpaceX quarterly revenue jumps, beats estimates as AI business surges Positive Sentiment: AI business is scaling rapidly: The Super Intelligence segment generated roughly $7.56 billion in revenue, up more than eightfold, and became SpaceX’s largest revenue contributor. Management said new computing deployments are currently producing payback in less than a year, helping validate the company’s AI infrastructure strategy. Why SpaceX Stock Popped After Earnings Positive Sentiment: Upbeat outlook and analyst support: SpaceX guided to $33 billion-$37 billion in first-quarter 2027 revenue, while its backlog reached about $63 billion. JPMorgan raised its price target to $500, and other firms including Wells Fargo, TD Cowen and Needham also increased targets or reiterated bullish ratings. Top Analysts Boost Price Targets After Q3 Beat Positive Sentiment: Merger speculation added momentum: Elon Musk called a Tesla-SpaceX merger a good idea, and both companies formed independent committees to examine a transaction. A combination could create synergies across AI, vehicles, robotics, connectivity and data. However, no deal is certain and shareholder approval would be required. SpaceX and Tesla boards form special committees to review merger Neutral Sentiment: Starlink remains an important financial base: Connectivity revenue rose 69% to approximately $5.25 billion, with 13.6 million consumer subscribers and strong enterprise and government growth. Investors are watching whether subscriber expansion and direct-to-device plans can support the AI buildout. Negative Sentiment: Capital intensity remains the key risk: SpaceX spent about $19.6 billion on capital expenditures in the quarter and expects $35 billion-$40 billion in fourth-quarter spending. Analysts have warned that continued AI expansion could require substantial borrowing and create execution, power-availability and cash-flow risks. SpaceX Bulls Get Louder After Q3 Earnings Print Negative Sentiment: Potential supply and governance overhangs: Upcoming insider share unlocks could increase selling pressure, while concerns about Starlink’s geopolitical exposure and the uncertain terms of any Tesla merger remain risks to valuation. Insiders Place Their Bets In other SpaceX news, COO Gwynne Shotwell sold 342,170 shares of the stock in a transaction on Tuesday, September 22nd. The stock was sold at an average price of $153.57, for a total value of $52,547,046.90. Following the completion of the transaction, the chief operating officer owned 2,472,035 shares in the company, valued at approximately $379,630,414.95. This represents a 12.16% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.
Wall Street Analysts Forecast Growth A number of equities analysts have recently commented on the stock. Phillip Securities raised shares of SpaceX to a “strong sell” rating and set a $75.00 target price on the stock in a report on Friday, July 31st. UBS Group reaffirmed an “overweight” rating and issued a $300.00 target price on shares of SpaceX in a report on Wednesday. Pivotal Research set a $260.00 target price on shares of SpaceX in a report on Wednesday. Wedbush assumed coverage on shares of SpaceX in a research note on Tuesday, June 30th. They set an “outperform” rating and a $190.00 target price for the company. Finally, HSBC reissued a “hold” rating on shares of SpaceX in a report on Wednesday. Three analysts have rated the stock with a Strong Buy rating, thirty have assigned a Buy rating, nine have assigned a Hold rating and four have issued a Sell rating to the company’s stock. According to data from MarketBeat.com, the company has a consensus rating of “Moderate Buy” and a consensus price target of $243.08.
Check Out Our Latest Report on SpaceX
SpaceX Company Profile (Free Report)
Space Exploration Technologies Corp., commonly known as SpaceX, is a privately held aerospace company founded in 2002 by Elon Musk. The company develops and operates launch vehicles and spacecraft designed to reduce the cost of access to space and support commercial, government and scientific missions.
SpaceX’s principal products and services include the Falcon 9 and Falcon Heavy rockets, the Dragon spacecraft and the Starlink satellite communications network. Falcon rockets are used to launch satellites, cargo and crew, while Dragon spacecraft support transportation to and from low Earth orbit.
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SpaceX just posted its first quarterly profit, but the biggest spending wave in the company's history is about to hit the income statement at the same moment Elon Musk is chasing a revenue target that would make it one of…
SpaceX (NASDAQ:SPCX | SPCX Price Prediction) earned $4.4 billion in the third quarter. A year earlier, it lost $1.1 billion, and its shares rose 7.79% to $159.31 after the report.
Revenue grew more than 160% to $14.6 billion. The AI computing division supplied $7.6 billion of that total, which makes it the largest business at a company most people still know for rockets and Starlink.
On the call, Elon Musk said annual recurring revenue by the end of 2027 could be “somewhere between $500 billion and a trillion.” To get there, SpaceX would have to build compute faster than almost any company has tried.
That creates a problem for shareholders. The first profit arrived just before the biggest spending in SpaceX history starts showing up on the income statement, and a possible combination with Tesla (NASDAQ:TSLA) would need to clear an unusually high approval bar.
Tesla rose 3.41% to $386.47 the same day. It is still down 14.06% for 2026.
How Durable Is SpaceX’s First Profit? Net income of $4.4 billion was higher than operating income of $2.8 billion, so items below the operating line helped. Adjusted EBITDA of $8.8 billion excludes depreciation, which matters most here.
Connectivity’s 55% gross margin also got a one-time lift of about 3%, mostly from tariff refunds. The superintelligence division earned $431 million in operating income after $1.2 billion of stock compensation tied to Cursor. Another $23 billion in Cursor awards will be expensed over about three years.
Capex was $19.6 billion last quarter and could reach $40 billion in the fourth. That spending turns into depreciation, and GPUs lose value faster than launch pads do.
Payback in Under a Year Assumes Prices Hold Management said new compute installations pay for themselves in less than a year, with pricing a little above the high end of a $30 to $50 per watt range. That figure is the firmest support for the bullish view.
Musk said every hyperscaler is asking for capacity. He prefers short contracts near spot rates because he expects computing to be worth more per watt over time.
Short contracts reprice quickly, up or down. If newer chips or a pause in demand push rental rates lower, payback gets longer just as depreciation tops. GPUs that age faster than expected would do the same thing, because a chip that earns less in its second year takes longer to pay back its cost.
What Has to Go Right to Reach 13 GW SpaceX ended the quarter with 1.7 GW of computing and is aiming for 13 GW by the end of 2027. Musk said power, cooling, and electrical equipment are the limits. SpaceX is building 20 GW of new power and cooling and casting its own turbine blades, because suppliers say those parts are 12 to 18 months behind.
All of that expansion, the power, the cooling, the turbines, has to come from somewhere, and the suppliers behind it rarely get the attention the chipmakers do. We pulled together seven of them in a free report on the AI infrastructure trade.
Most of the 2027 plan depends on Vera Rubin systems from NVIDIA (NASDAQ:NVDA), so those chips have to arrive on time. Demand also has to keep up. Grokbot had 800,000 paid weekly users in early October, which is still small for a fleet that size.
Dilution and a Tesla Vote Hang Over Holders SpaceX’s first bond sale raised $25 billion, but debt adds fixed costs to revenue sold on short contracts. Paying in stock dilutes holders directly. The $60 billion Cursor deal came with billions in replacement equity awards.
A Tesla deal needs 50% of all outstanding Tesla shares, Musk said. That is hard to reach because many holders never vote, and Musk has stepped back from the talks because he has a conflict.
More scale and cheaper capital would help SPCX holders. However, they would likely bear any premium paid to win Tesla votes, and Musk said he was “tap dancing through a minefield” on the topic.
Valuation Leaves Little Room for SPCX Missteps SPCX looks expensive at $159.31. A market value of about $2.10 trillion already assumes much of the 13 GW build will happen, before depreciation, stock awards and dilution hit earnings.
Weekly Starship flights targeted for the first half of 2027 and possible S&P 500 eligibility give the stock some upside, but capex will matter more for earnings.
NVIDIA holds a less exposed position in this expansion. It sells SpaceX its systems, expects 74.0% gross margins this quarter, and gets paid before any rental price risk shows up. That view would change if SpaceX turns its $63 billion backlog into revenue while keeping payback under a year.
Contact [email protected] for any questions or corrections.
SpaceX's AI segment generated more revenue than launches and connectivity combined in Q3. That segment also became profitable, with net income of $431 million, compared to a $1.26 billion loss a quarter ago.
SpaceX's revenue more than doubled and a single quarter sent shares surging nearly 8%, yet the stock sits almost exactly where it started trading. Something has to give, and the next few milestones will determine which direction.
SpaceX (NASDAQ:SPCX | SPCX Price Prediction) is a Hold at $159.31, a price that stands almost exactly where the stock traded early in its public life, even though revenue more than doubled in a year. A blowout third quarter lifted shares 7.79% in one session, so investors now have to decide whether the range is finally breaking.
SpaceX has three divisions. Space covers Falcon 9, Falcon Heavy and Starship launches. Connectivity is Starlink. Super Intelligence (SI) holds the compute expansion, Grok and Cursor, which SpaceX bought at a $60 billion implied equity value. Shares have ranged from $104.83 to $225.64.
Triple-Digit Growth Gives Bulls a Powerful Story
Third-quarter revenue reached $14.6 billion, up 161%, beating the $13.02 billion consensus. Net income came in at $4.4 billion, compared with a $1.1 billion loss a year earlier. SI revenue rose 830%, Connectivity grew 69%, and backlog reached $63 billion.
The guidance is even stronger. Management expects first-quarter 2027 revenue of $33 to $37 billion. Elon Musk said the company is “hounded relentlessly by every hyperscaler” to rent out more compute (the same AI data-center demand we tracked across power, cooling, and networking suppliers in a free report). Analysts raised their average 2027 EPS estimate to $2.1223, up from $0.6531 90 days ago.
A 200x Forward Multiple Leaves No Margin for Error
The stock trades at 200 times forward earnings, 84.54 times trailing sales and 501.68 times EV to EBITDA. Trailing diluted EPS is still -$1.10.
Spending is heavy. Third-quarter capex was $19.6 billion, and fourth-quarter capex is guided to $35 to $40 billion. Cursor brings $23 billion in retention awards that will hit as stock-based compensation over about three years. The company also warned that fourth-quarter gross margins will look more like the second quarter’s, because the third quarter got one-time help, including a tariff-refund boost of about 3% to Connectivity margins.
Uncertain Milestones Will Decide Where the Range Breaks
The core business is strong. Starlink has 13.6 million consumer subscribers paying $69 a month on average, and enterprise and government revenue grew 91%. Even so, the biggest projections rest on things SpaceX has yet to do: weekly Starship flights, 10 gigawatts of new compute in 2027, and TeraFab chip production. Musk called success on Flight 15 “more likely than not,” which still leaves a real chance of failure.
Analysts See 41% Upside While Shares Tread Water
At $159.31, the stock stands well below the average analyst target of $224.81, which implies about 41.1% upside. Analyst targets are estimates, and none of them is guaranteed. The 38 covering analysts rate the stock as follows:
Strong Buy: 7
Buy: 23
Hold: 5
Sell: 3
Over the past month, SpaceX gained 4.91% while the S&P 500 fell 0.04%. Across its full available trading history, though, the stock is down 1.02%, while the S&P 500 is up 13.38% year to date. The 50-day average of $148.62 and 200-day average of $145.67 show how little the stock has moved overall.
SpaceX Stays a Hold Until Starship and Capex Deliver
At $159.31, SpaceX is a Hold. Here is why.
A Buy case would need Flight 15 to catch both stages and the fourth-quarter report to show revenue keeping pace with $35 to $40 billion of capex. If Starship fell or margins fall harder than guided, the stock would lean toward a Sell.
Waiting costs little. The stock has gone nowhere for months, so a few more quarters of proof means giving up very little gain. Buying too early carries a real risk, because at a forward multiple near 200, a single miss could send shares back toward the bottom of their range.
Each quarter, keep an eye on SI revenue excluding Cursor, Starlink subscriber additions, gross margin and launch rate. SpaceX has to show that its spending turns into earnings before the stock can climb out of a range that has held since its debut.
Contact [email protected] for any questions or corrections.
Elon Musk's latest clash with Ukraine underscores the critical role that his company's Starlink satellite internet service has played in Kyiv's defense against Russia, which invaded unprovoked in 2022.
It's also laid bare the downsides of depending on a single provider for satellite internet communications, though other options are not yet comparable to SpaceX's Starlink and its military-grade Starshield offering.
On Oct. 14, Ukrainian officials accused SpaceX of undermining the country's ability to defend itself.
SpaceX and the U.S., they said, had suddenly and without warning imposed speed limits on Starshield. SpaceX describes Starshield as a "secured satellite network for government entities" that "leverages Starlink technology."
The changes cut wireless internet connectivity in drones and other aircraft moving at speeds over 100 miles per hour that Ukrainian forces were using in the campaign against Russia. A Ukrainian senior commander told The New York Times the Starlink restrictions cost his unit more than $1 million and delayed missions by 3 days.
Musk and President Donald Trump, both critics of Ukrainian President Volodymyr Zelenskyy, have each shirked accountability for the communications disruptions in the war-torn nation.
On Tuesday, The Wall Street Journal reported that Musk individually ordered the service changes, and had discussed them with Trump before putting them in place. Trump insisted on Wednesday that he "was not involved."
Robert Weissman, who is co-president of watchdog group Public Citizen, said the situation is an "extreme danger" that raises antitrust and security concerns around Musk's ability to control a "crucial means of communication."
"People worry about the political, as well as economic, impacts of oligarchy, and this is it," Weissman said in an interview. "It's not just that Musk can drown out other speakers, he can close down communications in a national security context for a country. No person should have that ability or power."
watch now
The disruptions have prompted a bipartisan group of lawmakers in the U.S. to call for an investigation into Musk's actions, including calls for him to potentially testify under oath.
Sen. John Cornyn, R-Texas, told CNBC on Wednesday that he doesn't believe Musk would have acted "without at least the acquiescence of the White House," and called attempts to throttle Starlink service in Ukraine "frankly shameful."
"There's a reason why we've had relative peace in Europe since World War II," Cornyn said in a "Squawk on the Street" interview. "And that's because of the alliance between the United States and our European allies. And I think anything we do to undermine that or degrade that is a big mistake."
Rep. Pramila Jayapal, D-Wash., called for an investigation on the matter and wrote, in a social media post Wednesday, "No billionaire, especially one that gets massive contracts from our government, should have the power to unilaterally decide to shut down communications and weapons during a war of critical importance to the US and Ukraine."
On SpaceX's earnings call this week, executives didn't address the issue and weren't asked about it by analysts.
Starlink dominance Governments or companies looking for an alternative to Musk, SpaceX and its satellite internet services have few options.
Amazon's Leo, which also delivers internet connectivity via a low Earth orbit satellite constellation, is seven years in the making and has yet to fully come online, with only 390 satellites in orbit.
SpaceX, by comparison, boasts a Starlink constellation of more than 11,000 satellites in orbit, according to data tracked by astronomer Jonathan C. McDowell. Starlink connectivity is live in 174 countries, SpaceX COO Gwynne Shotwell said on Tuesday's earnings call.
Blue Origin, Jeff Bezos' space company, in January unveiled a service called TeraWave for enterprise and government customers. It's targeting deployment of the first batch of satellites in the fourth quarter of 2027.
France's Eutelsat, also a competitor to Starlink, has more than 600 satellites in orbit. The stock surged 23% on Oct. 14 as reports emerged that Musk had restricted Starlink in Ukraine.
Several countries are looking into sovereign satellite communications systems. The EU is building IRIS², which is expected to span hundreds of satellites, but the first launches aren't expected until 2029.
Most of these planned systems are unlikely to "come anywhere close" in terms of capacity, coverage, resilience or cost compared to Starlink, said Christian Freiherr von der Ropp, an independent satellite consultant. The cost, size, weight and power draw of Eutelsat's terminals make them particularly unsuitable in the battlefield, he added.
While SpaceX's Connectivity business has raced ahead of rivals, the company also has the advantage of overseeing a hugely successful rocket launch business, which has carried satellites to orbit for many of its competitors.
SpaceX is now phasing out commercial rides on its workhorse Falcon 9 rocket, while it tests and develops its massive Starship rocket.
Many new constellations "could therefore face substantial delays and materially higher launch costs," von der Ropp said.
This week, Ukraine and European lawmakers moved to explore alternatives to Starlink, framing the issue as a matter of national security.
Their concern is that access to a critical communications service could potentially be disrupted "as a consequence of Musk's political agenda," said von der Ropp.
"The degree of soft power SpaceX has accumulated over companies, governments and militaries is substantial, and that has now become very visible," von der Ropp said. "Inevitably, this is creating mistrust and accelerating demand for alternatives."
Zelenskyy wrote Wednesday in a post on X that he met with Norwegian officials and Kongsberg, a Norwegian defense company, to discuss air defense systems and "launching work on new satellite communication capabilities for our warriors."
Musk enjoyed accolades for providing Starlink terminals and satellite internet service during the early days of the war, but relations have soured between the world's richest person and Ukrainian officials over the years.
Musk previously ordered SpaceX engineers to shut off Starlink's satellite network over Crimea to thwart a Ukrainian attack on Russian warships, according to a chapter in the 2023 Musk biography written by Walter Isaacson. Musk disputed the report. The revelation drew rebuke from Ukrainian officials, including a top Zelenskyy aide, who said it led to Ukrainian civilians being killed.
"This is the price of a cocktail of ignorance and big ego," Mykhailo Podolyak, a top Zelenskyy advisor, wrote in a post on X, then known as Twitter.
Musk has also repeatedly argued that Ukraine should strike a "truce" with Russia and cede ownership of Crimea, a strategically important territory, to Putin.
Musk's treatment of Ukraine played a part in Canada's decision to cut ties with Starlink. Officials in India and Taiwan have also expressed wariness of Starlink, citing national security concerns and preferring to adopt a mass communications service that's not controlled by SpaceX.
Musk lashed out at Indian "oligarchs" for stalling the Starlink rollout in the country.
He's also targeted some of Starlink's prospective enterprise customers.
Starlink has become the dominant provider for airlines' in-flight satellite Wi-Fi service, signing on dozens of carriers, including United Airlines, Alaska Airlines, American Airlines and Southwest Airlines.
But Delta Air Lines is one of the few carriers to choose Amazon's Leo service.
Earlier this month, Musk posted on X that Delta CEO Ed Bastian would "lose his job" over not choosing Starlink, following unconfirmed comments posted on X that Bastian told employees, "We do not want to be with Elon Musk. Trust me."
Bastian denied making the comment, and told CNBC on Oct. 9 that he's a "big fan" of Starlink and even drives a Tesla.
"All this nonsense about it being personal is not true at all," he said.
-- CNBC's Elsa Ohlen and Leslie Josephs contributed reporting to this story.
Just a few months ago, Space Exploration Technologies (SPCX +7.80%) completed the largest initial public offering (IPO) in history. At the time, the company was valued around $1.8 trillion. One of the biggest critiques of SpaceX's public debut was that its valuation was stretched amid CEO Elon Musk's uncanny ability to induce hype and spectacle.
However, following a blowout third-quarter earnings report, SpaceX has given investors a compelling reason to rethink how much the company is actually worth. Musk spent considerable time detailing an ambitious plan to expand SpaceX's artificial intelligence (AI) compute capacity throughout next year.
By the end of 2027, I predict SpaceX stock could reach more than $360 -- representing at least 122% upside from its current price. Read on to learn how I arrived at that forecast.
Image source: Getty Images.
SpaceX's latest earnings just changed the investment thesis
SpaceX generated $14.6 billion in revenue during the third quarter, representing 161% growth year over year. More importantly, the company reported $4.4 billion in net income, reversing a $1.1 billion loss from the prior year.
Starlink continues to be an important financial foundation for the company. Revenue from the connectivity segment increased 69% year over year to $5.2 billion, while operating income doubled to $2.4 billion. Meanwhile, the space division generated $1.8 billion in revenue supported by the company's first revenue-generating Starship mission.
The biggest development came from the super intelligence (SI) segment. SpaceX's AI division generated $7.6 billion in revenue during the third quarter, representing a jaw-dropping increase of 830% year over year. The biggest surprise was that super intelligence delivered $431 million in operating income, compared with a $1.7 billion operating loss a year earlier.
This profitability milestone matters because SpaceX is investing unprecedented sums in compute infrastructure. The company's capital expenditures (capex) reached $19.6 billion during the quarter, with $16.4 billion directed toward AI build-outs.
Even so, SpaceX has robust financial flexibility. The company ended Q3 with approximately $89.8 billion in cash and marketable securities and $38.8 billion in debt and finance leases. Combined with widening operating profits, SpaceX's balance sheet provides a solid foundation for continued expansion.
SPCX Space Exploration Technologies$159.31+$11.52 (+7.80%)
NASDAQ · As of 4:00 PM ET 10/21/26
SpaceX could become the next hyperscaler
During the earnings call, Musk discussed that SpaceX expanded its computing capacity to 1.7 gigawatts (GW), compared with just 0.6 GW a year earlier. By the end of the year, SpaceX is expected to have between 2.5 GW and 3 GW of capacity online.
Musk detailed that SpaceX is seeking to add an incremental 10 GW during 2027, potentially bringing total capacity to at least 13 GW. In a more optimistic scenario, the company could reach 20 GW by the end of next year. This is important because it illustrates how demand for AI infrastructure remains unusually high. Goldman Sachs estimates the five largest AI hyperscalers -- Amazon, Alphabet, Microsoft, Meta Platforms, and Oracle -- could spend $1.2 trillion on capex in 2027. For reference, this cohort will spend about $750 billion on AI infrastructure this year.
Meanwhile, Anthropic's prospectus revealed the company has reportedly committed more than $600 billion of cloud and computing commitments -- a figure that could rise to $750 billion based on pending negotiations.
SpaceX is already benefiting from the AI infrastructure supercycle through computing agreements with Google Cloud, Anthropic, Reflection AI, and a host of other unnamed customers. As capacity remains constrained, companies like SpaceX that are capable of delivering infrastructure quickly should be able to command pricing power.
SpaceX has already demonstrated an ability to build AI infrastructure at an extraordinary pace. In 2024, Musk's xAI -- which is now part of SpaceX -- built its Colossus supercomputer, initially featuring 100,000 Nvidia GPUs, in just 122 days. Even more impressive, it took only 19 days from the installation of the first server rack to the start of AI training. As additional capacity comes online throughout 2027, SpaceX should be able to monetize those investments through long-term customer contracts and recurring AI services revenue at a premium.
Why SpaceX stock could double by next year
Musk forecasts that SpaceX could exit 2027 with an annualized revenue run rate between $500 billion and $1 trillion. If I cut the lower end of Musk's guidance in half, that would still be an impressive run rate of $250 billion by the end of next year. Applying a price-to-sales (P/S) ratio of 20 to the annualized run rate would give SpaceX an implied market cap of $5 trillion. This translates to about $368 per share.
Against this backdrop, I think SpaceX stock is an attractive long-term investment to buy and hold. With that said, smart investors will refrain from following a post-earnings rally. The more prudent strategy is to use dollar-cost averaging over the course of many years as SpaceX's bullish scenario becomes more realistic.
State Street Markets' Daniel Gerard says the recent tech-stock sell-off may create a buying opportunity in large-cap tech. He sees SpaceX's latest report as encouraging for hyperscalers and chipmakers, citing strong earnings and margins, and a substantial chip backlog.
Although the artificial intelligence (AI) revolution garners most of the credit for sending Wall Street's major stock indexes to new heights, don't overlook initial public offering (IPO) euphoria as a stock market catalyst in 2026.
A little over four months ago, on June 12, Elon Musk's Space Exploration Technologies (SPCX +7.80%), better known as SpaceX, rewrote Wall Street's record books. SpaceX went public at a $1.77 trillion valuation, raising $85.7 trillion from its IPO, including the underwriters' overallotment. This nearly tripled Saudi Aramco's $29.4 trillion IPO cash raise.
Image source: Getty Images.
But not all of SpaceX's history-making moments are worth celebrating. Today, Oct. 22, Musk's AI and space infrastructure goliath will make dubious history, with retail investors set to pay the price.
There wasn't much about the SpaceX IPO process that followed historic norms, including the company's insider lockup period. An insider is a high-ranking executive, board member, or early investor who may possess non-public information.
Usually, companies going public employ a 180-calendar-day lockup period that prevents insiders from selling their shares. This is done to ensure that insiders don't take advantage of retail investor euphoria shortly after a company debuts.
In SpaceX's May 2026 prospectus, the company outlined a staggered and accelerated share-unlock period for its early-release-eligible insiders. In simpler terms, Elon Musk wouldn't be able to sell his shares for 366 calendar days after SpaceX's IPO, but most of the company's other insiders would be given several opportunities to sell some of their shares before the traditional 180-calendar-day mark.
Great look at the SpaceX shares unlock schedule as well as the potential passive buying schedule from @JSeyff @FrancisSharoon Depending on the early post-IPO returns, this could really play with and disperse the returns of "passive" funds (which is why there's arguably no such thing as passive). $SPCX
— Eric Balchunas (@EricBalchunas) May 28, 2026
SpaceX's share-unlock events fall into two categories, of which the first is earnings-based events. On Aug. 6, two trading days after SpaceX reported its second-quarter operating results, roughly 911.5 million shares became eligible for sale by select insiders.
Today, Oct. 22, marks the second trading day after Space Exploration Technologies' third-quarter report and, therefore, the release of another 911.5 million shares by insiders. This could provide up to $133 billion in selling pressure.
In addition to earnings-based events, approximately 319 million shares become newly eligible for sale on calendar days 70, 90, 105, 120, 135, and 180. Given that the 135th calendar day lands on a weekend, this coming Monday, Oct. 26, will mark the release of another 319 million shares.
Image source: Getty Images.
We're witnessing the greatest wealth transfer in Wall Street's historyThis staggered and accelerated share lockup period for early-release-eligible insiders poses a significant problem for SpaceX's retail investors.
When the company went public, it sold approximately 555.6 million shares, or less than 5% of its outstanding shares (OS). Most companies going public sell 10% or more of their OS.
SpaceX gaining fast-track entry into the Nasdaq-100, Russell 1000, and Russell 3000 with its historically low float provided quite the boost to the company's share price for a few weeks after its debut. But with each new share-unlock event, SpaceX's float is rapidly climbing and threatening to weigh on its shares.
SPCX Space Exploration Technologies$159.31+$11.52 (+7.80%)
NASDAQ · As of 4:00 PM ET 10/21/26
These ongoing share lockups also allow eligible insiders their first opportunity in years, if not a decade, to cash in their chips. What we're witnessing is one of the greatest wealth transfers in the history of Wall Street, from retail investors to SpaceX's insiders.
This unique approach rewards SpaceX's early investors and can punish retail investors.
Elon Musk wants to give every American kid a piece of SpaceX. History shows what happens when millions become shareholders overnight.
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Elon Musk says he'll give every child in the US a piece of his space company, SpaceX.
Kent NISHIMURA / AFP via Getty Images
Christmas came early: Elon Musk wants American children to own stock in his space company, SpaceX, next year.
Musk wrote on X around 1 a.m. Monday that he planned to make the donation next year — "the first of many," he said. SpaceX went public this summer.
Giving one share to each of the estimated 72 million US children would cost roughly $10.7 billion at SpaceX's closing price of $147.92 on Friday. Musk's 4.77 billion SpaceX shares were worth about $706 billion at that price, so the gift would reduce his holdings by about 1.5%.
President Donald Trump said on Truth Social on Monday that the shares would be transferred through Trump Accounts, tax-advantaged investment accounts for eligible American kids launched this summer. Under temporary Treasury rules, donated shares generally cannot be sold for five years.
"This is exactly what was envisioned when we created TRUMP ACCOUNTS," Trump said. "Bringing together the GREAT PRIVATE SECTOR, Elon and so many more, to invest in our children."
The White House said nearly 70 million Trump Accounts have been created. Numerous entities have agreed to contribute, including a $6.25 billion donation from billionaire couple Michael and Susan Dell for children in lower-income zip codes. In July, SpaceX President Gwynne Shotwell and her husband pledged personal SpaceX shares worth at least $321 million, prioritizing lower-income communities.
The White House, Elon Musk, and SpaceX did not immediately respond to a request for comment from Business Insider.
Musk's plan to give away SpaceX stock raises questions about a new kind of billionaire philanthropy: Gifting people shares in a company instead of cash.
Giving millions of children a stake in SpaceX could give them money to use later in life — but the value is tied to a single company's stock. And history shows that efforts to spread corporate ownership can yield uneven results, from big investment returns to stakes being sold for quick cash.
Here are other historical efforts to share wealth or spread corporate ownership among everyday people.
US Sen. Mike Gravel's 1978 share proposal to Alaskans
Senator Mike Gravel (D) represented Alaska from 1969 to 1981. He ran for president in 2008 and 2020.
Original Caption
In 1978, US Sen. Mike Gravel proposed a statewide ownership corporation that would have given Alaskans, including children, stakes in major energy and other business projects. The Trans-Alaska Pipeline System was one potential investment.
The idea was that Alaskans would benefit from an economic boom and any rising asset values. However, the plan never materialized.
Alaska instead developed a dividend system that draws on its preexisting Permanent Fund, a state fund established in 1976 with oil royalties that invests in stocks, bonds, and other assets. It began paying annual cash dividends to eligible Alaskans in 1982.
The Permanent Fund still continues today, with a $1,200 dividend distributed to every eligible Alaskan adult and child who applied in 2026. The initial dividend this year was set at $1,000, but recipients also got an extra $200 energy-relief payment.
Eastern Europe's 1990s mass privatization experiment
In the early 1990s, governments across Central and Eastern Europe used voucher programs to turn citizens into shareholders of former state-owned companies.
MICHAEL EVSTAFIEV/AFP via Getty Images
Following the collapse of the Soviet Union in 1991, several countries in Central and Eastern Europe used voucher programs to transfer former state-owned companies into the hands of everyday people.
Russia began distributing privatization vouchers to roughly 144 million people in 1992. Russians could use them to buy shares in former state companies, exchange them for shares in investment funds, or sell them for cash.
Czechoslovakia used a similar system, allowing adults to buy low-cost voucher books and use the points to bid on company shares or invest through funds. After Czechoslovakia split in early 1993, the Czech Republic continued its voucher program, while Slovakia canceled its planned second wave of voucher privatization.
Other countries, including Poland, Romania, Bulgaria, and the Baltic states, adopted their own versions of mass privatization.
The programs were designed to rapidly create broad public ownership. But many recipients sold their vouchers for cash amid economic uncertainty, rather than retaining shares.
Evžen Kočenda, a professor at Charles University's Institute of Economic Studies, said that the program was a good idea at the time, given the region's poor economy, but that ultimately, the vouchers were not 'real money,' but rather a financial asset.
Kuwait's 2019 national stock exchange privatization
Kuwait privatized some of its national stock exchange, Boursa Kuwait, to its citizens throughout 2019.
YASSER AL-ZAYYAT/AFP via Getty Images
Kuwait privatized Boursa Kuwait, the operator of its national stock exchange, in 2019, and gave Kuwaitis the opportunity to purchase a stake in the company. The only requirement for registration was that the individual was a Kuwaiti citizen.
Those who participated — about 83,000 of the country's 4.4 million — were initially allocated up to 70 shares each. The initial public offering share price was set at 100 Kuwait fils, roughly $0.33 per share.
Following the privatization, Kuwaiti citizens and private-sector investors together owned roughly 94% of Boursa Kuwait. The Public Institution for Social Security held the remaining 6%.
The Kuwaitis who participated saw a huge return on investment: When Boursa Kuwait debuted on the public market in September 2020, its shares rose more than 10-fold from their 100-fils IPO price, closing at 1,055 fils, or about $3.41.
Today, the privatization is widely regarded as a major success in the investment world, and Boursa Kuwait has described it as the Middle East's only privately owned stock exchange.
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Tristin Hoffman is a Life Fellow on Business Insider’s Editorial Partnerships team. Her reporting focuses on retail, travel, business, and more through a visual storytelling and lifestyle lens. She has previously reported on Oregon’s economy for The Oregonian and Pennsylvania litigation for Law.com. Her stories have inspired policy changes, shed light on public officials’ misconduct, and gained national awards. She graduated from the University of Oregon, where she studied journalism and law while serving as editor-in-chief of The Daily Emerald.
Space Exploration Technologies (SPCX +7.80%), a rocket launches and satellite broadband services provider, closed at $159.31, up 7.79%. Wednesday's gains followed stronger-than-expected third-quarter earnings, and investors are now watching compute growth and Starlink demand.
Trading volume reached 217.4M shares, coming in about 123% above its three-month average of 97.3M shares. Space Exploration Technologies IPO'd in 2026 and has fallen 1% since going public.
How the markets moved todayThe S&P 500 rose 0.59% to 7,757, while the Nasdaq Composite climbed 1.05% to 26,703. Among aerospace & defense peers, Rocket Lab closed at $53.67, up 5.44%, while AST SpaceMobile ended at $40.90, down 0.56%, as investors tracked launch and satellite-comms momentum.
What this means for investorsSpaceX stock surged following its strong third-quarter report, but considering its performance, the increase may make sense.
Indeed, Q3 revenue rose by 161% yearly to $14.6 billion. Most of this came from AI-related revenue gains, which CEO Elon Musk refers to as "super intelligence." That segment reported 830% yearly revenue growth!
With that gain, it turned profitable, reporting a quarterly net income of $4.4 billion. That was well above the nearly $1.1 billion loss in the year-ago quarter.
Nonetheless, it is revenue projections that may have gained investor attention. Musk forecasted that annual revenue could reach between $500 billion and $1 trillion in 2027.
However, CFO Bret Johnsen was more cautious, projecting a more modest $33 billion to $37 billion in Q1 2027. Historically, Musk has not always delivered on such projections, at least on a shorter time frame. Nonetheless, it may hint at his goals for SpaceX.
Moreover, he again hinted at a possible merger with Tesla. Since Tesla's Roadster used SpaceX’s technology to fly, investors are likely not surprised by this news.
Finally, rising revenues have also reduced its price-to-sales (P/S) ratio to 68. Still, given the pace of its revenue growth and the company's long-term ambitions, one can understand why an investor might pay that multiple for the space stock.
Neocloud stocks steadied Wednesday after Space Exploration Technologies Corp. (NASDAQ:SPCX) delivered a third-quarter report packed with evidence of strong demand for AI compute. Deepwater Asset Management managing partner Gene Munster read the results as a positive signal for the rest of the group.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of SPCX, MSFT, AAPL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Disclaimer: I am not an investment advisor or professional. This article is my own personal opinion and is not meant to be a recommendation of the purchase or sale of stock. The investments and strategies discussed within this article are solely my personal opinions and commentary on the subject. This article has been written for research and educational purposes only. Anything written in this article does not take into account the reader’s particular investment objectives, financial situation, needs, or personal circumstances and is not intended to be specific to you. Investors should conduct their own research before investing to see if the companies discussed in this article fit into their portfolio parameters. Just because something may be an enticing investment for myself or someone else, it may not be the correct investment for you.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
SpaceX shares SPCX surged 7% on Wednesday after the aerospace and artificial intelligence company reported stronger-than-expected third-quarter results and issued an upbeat revenue forecast, lifting sentiment across chipmakers and data-centre infrastructure suppliers. Investors welcomed accelerating demand for AI computing, although analysts cautioned that financing, power availability and execution risks remain.
Elon Musk promised a share of SpaceX to every kid in America, Trump called it proof his accounts are working, but the enrollment numbers tell a far more complicated story.
On Oct. 19, 2026, President Trump thanked Elon Musk for giving SpaceX (NASDAQ:SPCX | SPCX Price Prediction) stock to millions of American children through Trump Accounts. Trump said the gift is what he foresaw when the accounts were created, according to the Washington Examiner. Musk pledged the shares for next year, and did not explicitly say how the shares would be distributed.
Bloomberg Law also reported that parents claimed under 1% of the 60 million auto-enrolled accounts in the first week.
Trump Tied the Gift to Trump Accounts Business Insider reported that Trump praised Musk’s “incredible generosity.” Trump made the link months ago. On July 2, he told CNBC he expected Musk to donate SpaceX stock to the accounts, and he named Micron (NASDAQ:MU) and Michael Dell as other pledgers, per Bloomberg Law. As of publish time, Musk had not confirmed how the shares would be distributed.
What Musk’s Post Actually Says Musk posted on X around 4 a.m. ET on Oct. 19 that next year he would give one of his SpaceX shares to “every kid in America,” the first of many gifts, Axios reported. The post never mentions Trump Accounts. Yahoo Finance noted that Musk didn’t define “kid,” give an age range, address citizenship or explain how the shares would be delivered.
Every cost figure comes from outside estimates. TheStreet put one share for each of the 73.1 million people under 18 in the 2020 Census at $10.7 billion, using the Oct. 16 close of $146.03. Axios got $10.5 billion using about 72 million children. By TheStreet’s math, that is 1.1% of the 6.42 billion shares Musk controlled as of June 30. The Census count is an upper limit, since eligibility hasn’t been defined. SpaceX traded at $158.59 as of 3:40 PM ET today, up 7.31%.
Why Claiming an Account Matters On Oct. 1, Treasury auto-enrolled more than 60 million children under 18 who have a valid Social Security number. Fortune explains that a parent must claim the account through the app or trumpaccounts.gov before it can take contributions or receive the $1,000 government seed. Bloomberg Law reported that 164,000 accounts, or under 0.3%, were claimed in week one. That figure came from Treasury counsel Helen Morrison, speaking in her personal capacity.
It is a single snapshot, and no official statistic has been published. Separately, Bloomberg Law said about 10 million accounts were opened before auto-enrollment. If Musk’s shares do go through Trump Accounts, a parent would have to claim the account first.
Dell and Shotwell Pledges Show How Gifts Get Paid Out Michael and Susan Dell pledged $6.25 billion, or $250 per child for about 25 million children 10 and under in ZIP codes below a $150,000 median income. InvestmentNews says more than 10 million children had received $2.6 billion by Oct. 7. On July 6, SpaceX president Gwynne Shotwell pledged shares for more than 2 million children ages 11 to 17, worth $320 million at that day’s close, per 24/7 Wall St. InvestmentNews reports those shares haven’t been distributed yet.
Rules That Govern Donated Stock Temporary regulations published by Treasury cover “qualified general contributions,” including stock (effective September 30, 2026). Comments are due November 30, 2026. InvestmentNews says families can’t turn down donated shares and generally can’t sell them until five years pass or the year the child turns 17 ends, whichever comes first. AAII says withdrawals generally wait until the year the child turns 18.
Public AI Infrastructure You Can Research Now Dell Technologies (NYSE:DELL) shows what AI hardware demand looks like in reported numbers. In Q2 FY27, revenue reached $46.97B, up 57.8%. It also reported $60.90B in AI server orders and a record AI backlog of $95.00B. Full-year guidance rose to $192.0B. Shares gained 5.72% today to $487.97 but are down 14.64% over the past week. Free cash flow dropped 47%.
What to Watch Next Altimeter’s Brad Gerstner projects that private contributions could hit $100 billion by the end of 2027, according to Benzinga. Three things to watch: a official plan from Musk, SpaceX or Treasury, an updated count of claimed accounts and the November 30 comment deadline.
Contact [email protected] for any questions or corrections.
As Elon Musk aims to increase SpaceX's computing capacity exponentially, he'll face challenges related to funding, power supply and simply securing sufficient chips.
SummarySpace Exploration Technologies Corp., aka SpaceX, proved skeptics wrong as growth accelerates to 161% and the company swings to an operating profit.SI performance led the way amid strong demand for compute. Year-end 2027 capacity targets indicate room for growth is substantial.Risks include elevated CapEx, EU pushback against Starlink, and merger uncertainty, but the overall setup remains constructive.SPCX stock valuation is determined to be cheap when considering the company's positioning, multiyear growth prospects, and year-end 2027 ARR targets. RoschetzkyIstockPhoto/iStock Editorial via Getty Images
Introduction In late August, I initiated coverage on Space Exploration Technologies Corp., aka SpaceX, (SPCX), and decided that the stock was a Buy. Growth was shown to be strong, operating losses were narrowing, and the
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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Analyst's family has a beneficial long position in the shares of SPCX.
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Key Takeaways SpaceX crushed Q3 earnings expectations as AI infrastructure and Starlink revenue surged.Ambitious recurring revenue projections and a potential Tesla merger provide compelling growth catalysts.Technical momentum and substantial analyst-implied upside support SPCX's bullish outlook. SpaceX (SPCX - Free Report) shares have surged as much as 12% in Wednesday's trading session after Elon Musk's aerospace and artificial intelligence company delivered blowout Q3 results Tuesday evening, driven by soaring demand for AI infrastructure and continued growth in its Starlink satellite business.
Adding to investor enthusiasm, Musk discussed a potential merger with Tesla (TSLA - Free Report) ) while outlining extraordinarily ambitious revenue projections that could help SpaceX justify its premium valuation and a rally that has seen SPCX surge 40% in the last three months.
Image Source: Zacks Investment Research
SpaceX's Q3 Earnings Crush ExpectationsSpaceX reported Q3 earnings of $0.35 per share, crushing the Zacks Consensus Estimate of $0.10 by 250%. Revenue soared 161% year over year to $14.57 billion, easily surpassing expectations of $12.53 billion by more than 16%.
Notably, SpaceX generated $4.4 billion in net income, reversing a $1.1 billion loss in the prior-year quarter.
Growth was particularly impressive in the company's Super Intelligence (SI) segment, where revenue reached $7.56 billion, supported by accelerating demand for AI computing infrastructure.
Additionally, SpaceX's Connectivity division, which includes Starlink, its satellite-internet network, generated $5.25 billion in revenue as consumer subscribers climbed to 13.6 million.
Image Source: Zacks Investment Research
Lofty Revenue Projections & Potential Tesla MergerPerhaps most encouraging, SpaceX reiterated its goal of reaching $100 billion in annual recurring revenue (ARR) by the end of 2026, with Musk projecting an extraordinary $500 billion to $1 trillion in ARR by the end of 2027.
Furthermore, SpaceX issued bullish Q1 2027 revenue guidance of $33 billion to $37 billion, far exceeding Wall Street expectations of roughly $22 billion. These ambitious projections reflect growing confidence in the company's ability to monetize AI infrastructure investments.
Much of this projected growth is expected to come from expanding AI cloud infrastructure agreements with enterprise customers, along with increasing adoption of SpaceX's Grok AI applications and the recently acquired Cursor coding platform.
Meanwhile, Starlink provides another recurring revenue stream through its 13.6 million consumer subscribers and growing enterprise and government partnerships, including customers such as United Airlines (UAL - Free Report) ), Carnival Corporation (CCL - Free Report) ), Maersk (AMKBY - Free Report) ), and Deere and Company (DE - Free Report) ).
Investor enthusiasm was further bolstered by Musk's acknowledgment that SpaceX and Tesla have established special committees to explore a potential merger. Although a deal remains uncertain, combining the two companies could create unprecedented synergies across AI, robotics, satellite communications, and autonomous technologies.
SpaceX has already demonstrated its technological synergies with Tesla, helping the EV leader develop the rocket-inspired thrusters featured in Tesla's recently unveiled Roadster, which showcased the car's ability to briefly fly and perform midair stunts.
SPCX Technical Analysis & Zacks Price TargetAlthough SPCX is still more than 25% from its all-time high of $225 a share, the recent move above its 50-day simple moving average of roughly $147 a share suggests improving technical momentum and the potential for a continued breakout.
More intriguingly, the Average Zacks Price Target for SPCX is currently at $227 a share based on short-term price targets offered by 36 analysts.
It’s also noteworthy that SpaceX currently has a favorable average brokerage recommendation (ABR) of 1.78 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the recommendations given by 41 brokerage firms.
Image Source: Zacks Investment Research
Bottom Line: Should Investors Buy SPCX Stock?Despite its lofty valuation and aggressive capital spending, SpaceX's remarkable growth trajectory is becoming increasingly difficult to ignore.
With revenue accelerating, profitability improving, and an expanding AI infrastructure business, the company appears increasingly capable of growing into its premium valuation.
SpaceX currently sports a Zacks Rank #2 (Buy), making SPCX an attractive growth stock to consider even after its post-earnings surge, although investors should remain mindful of the substantial execution risks surrounding its ambitious growth projections.
U.S. stocks rose as strong earnings from Elon Musk's SpaceX eased concerns about the profitability of the artificial-intelligence business, sparking gains for chip makers.
Coming into Space Exploration Technologies' (SPCX +7.80%) third-quarter earnings report, confidence in AI infrastructure stocks was collapsing.
CoreWeave (CRWV -0.50%), the largest neocloud stock, has been at the center of the controversy since Chamath Palihapitiya posted a chart showing that some of its bond yields have reached 15%, a sign that doubts about its ability to pay back its massive debt have grown. Those concerns weighed on peers like Nebius and IREN, dragging them lower as well.
SpaceX may be best known as a space company, and its Starlink satellite internet business makes up the bulk of its profits, but the company is increasingly becoming an AI infrastructure company.
In the third quarter, SpaceX's SI, or superintelligence, segment made up more than half of its revenue and accounted for more than 80% of its capital expenditures.
The company is renting out its computing capacity to customers like Google and Anthropic in a similar way to the neoclouds, and it's seeing demand soar with SI revenue nearly tripling from the previous quarter to $7.56 billion.
CEO Elon Musk also made it clear on the call that there's no shortage of demand for AI compute.
Image source: Getty Images.
The SpaceX AI build-out is acceleratingMusk maintained his forecast that the company would bring an additional 10 gigawatts of compute online in 2027, which would be an astounding achievement, as that's roughly the amount of power it would take to power the homes in New York City.
Musk also told investors that current pricing for AI compute is generating a payback period of less than a year on new deployments, adding that pricing is slightly above the high end of the $30-$50 per watt range it had previously given. He called the current dynamics "extraordinary," and it's betting on that opportunity with plans to spend on $35 billion-$40 billion in capital expenditures in the fourth quarter, primarily on compute infrastructure, after spending $19.6 billion in the third quarter.
What it means for CoreWeave and the neocloud sectorFor CoreWeave, Nebius, and the rest of the neocloud sector, SpaceX's comments on pricing and fast payback periods are clearly a promising sign.
Those stocks were up after hours on Tuesday, along with SpaceX, but when regular trading opened today, they turned red, indicating that investors may not be so easily persuaded by SpaceX's comments. By afternoon trading, both stocks were up less than 1%, underperforming the Nasdaq.
Musk's comments bode well for the upcoming quarterly reports from CoreWeave and Nebius and could indicate that their growth will accelerate. However, that's only half of the equation for these stocks.
CoreWeave has plunged in recent weeks on concerns about its debt burden and interest payments. Its interest expense has now reached roughly a quarter of its revenue, a level unheard of for a stable company. Growth will help it absorb its debt and interest expense, but the company doesn't have the same luxury as SpaceX, which raised $75 billion in its IPO, has a highly profitable business in Starlink, and has much more credibility than CoreWeave, in part due to Elon Musk's role.
CRWV CoreWeave$61.82-$0.31 (-0.50%)
NASDAQ · As of 4:00 PM ET 10/21/26
Can CoreWeave bounce back?The good news for CoreWeave is that the company's revenue growth is expected to accelerate in the third quarter, as it starts to convert its $129 billion backlog into revenue and deploys new data center capacity.
Analysts expect revenue to jump 159% to $3.54 billion, and see its growth rate accelerating again in the fourth quarter. That means the company has a tall task ahead when it reports third-quarter earnings on Nov. 11. It has to hit or exceed that growth number and make progress on the bottom line.
It won't be easy, but after SpaceX's comments, the company's prospects are considerably better than they were a week ago.
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Elon Musk made the remarks during SpaceX's earnings call.
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SpaceX's AI rivals are clamoring to rent computing power from the artificial intelligence and rocket company, CEO Elon Musk said.
"We are also, frankly, hounded relentlessly by every hyperscaler and by dozens of smaller companies to rent more of our compute," Musk said during SpaceX's third-quarter earnings call Tuesday.
Musk said SpaceX could rent out the company's compute "several times over if we said yes to everyone."
SpaceX, however, is reserving a chunk of that capacity for its own AI ambitions, including scaling its AI chatbot Grok and Cursor, the coding startup it recently acquired.
Musk said SpaceX is seeking to devote roughly half of its compute to internal uses and rent out the other half to third parties. That balance could change month to month, he said.
"It's going to be dynamic," said Musk. "And obviously, our approach is to rent at the — effectively the spot market rate as opposed to sign these long-term deals."
The company expects the value of compute to increase as AI models improve and ultimately generate "more useful intelligence per watt," said Musk.
"And the value of that compute is proportionate to the useful intelligence per watt," Musk said, adding that rental rates for older Nvidia H100 chips have climbed from when they were new.
"I think that's likely to continue," said Musk. "I think we're going to face a shortage of super intelligence compute. And that shortage is going to remain for a long time."
Musk likened the situation to Monty Python's famed cheese shop sketch, in which a customer repeatedly asks for different cheeses only to find that none are available.
"We've actually tried to offload some of our inference compute to other cloud providers so that we can use more compute for training," the CEO said. "And we get the cheese shop sketch."
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Natalie is a senior reporter on Business Insider's Business News team covering the AI and data center boom.She was previously on BI's Legal Affairs team, where she handled major cases coming out of state and federal court, as well as bankruptcy. Her coverage often focused on stories at the intersection of law, business, politics, and technology. Natalie has covered Donald Trump’s criminal and civil cases, the wave of lawsuits against the second Trump administration, the indictment and criminal trial of Sean “Diddy” Combs, the shooting death of UnitedHealthcare CEO Brian Thompson, and the legal battles facing Elon Musk and his companies. Natalie came to Business Insider in June 2021 as a breaking news reporter, focusing on the most interesting angles on the day's trending news. Natalie largely drove BI’s coverage around the fatal “Rust” shooting involving Alec Baldwin and the disappearance and murder of Gabby Petito.Prior to joining BI, Natalie worked for the New York Post, the New York Daily News, and The Brooklyn Paper. She has an extensive background covering crime and courts. During her more than 12-year journalism career, she did a stint covering the police beat out of the New York Police Department's headquarters. Natalie, a Brooklyn native, graduated from Brooklyn College in 2012 with a degree in journalism.
Space-and-AI operator SpaceX SPCX reported $4.4 billion in third-quarter net income on $14.6 billion in revenue, with shares up 9.5% to $161.82 at 9:35 a.m. ET. Revenue jumped 161% from a year earlier. That is a big growth number—but the sharper question is how much cash this sprawling business can keep.
The earnings mix tells the story. SpaceX's earnings release put AI revenue at $7.56 billion, roughly 52% of total sales, versus $5.25 billion from connectivity and $1.77 billion from space operations. Starlink finished September with 13.6 million consumer subscribers. According to AP's reporting, AI became the largest revenue business, while Starlink remained the biggest profit generator. Growth has a new leader; earnings still lean on connectivity.
The valuation leaves little room for weak execution. The GuruFocus snapshot shows a $2.20 trillion market capitalization alongside a GF Score of just 15/100, a reminder that the rally runs well ahead of the displayed fundamental score. Meanwhile, SpaceX's quarterly figures show $16.44 billion in AI capital spending alone—more than twice that segment's revenue. Investors now need evidence that those enormous checks can produce durable cash returns. One profitable quarter raises the bar.
SpaceX (SPCX) earnings call last night offered investors plenty to digest, but one omission stood out to Bernstein analyst Doug Harned: orbital data centers. Speaking this morning with CNBC, Harned said the “silence” reflected competing priorities rather than fading interest in computing infrastructure in space.
Space Exploration Technologies Corp. delivered Q3 results that confirmed robust pricing power and accelerated capacity, supporting my reiterated Buy rating. Q3 revenue surged 161% YoY to $14.6B, with net income of $4.4B and adjusted EBITDA up 306% to $8.8B, highlighting strong operating leverage. Management guided to $33–$37B Q1 2027 revenue and reaffirmed $100B ARR by year-end, with compute capacity and backlog both running ahead of prior expectations.
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Elon Musk has previously said he was living in an Airstream trailer on the Memphis site.
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SpaceX is offering employees a pay bump to temporarily move to Memphis and help build its data centers.
Elon Musk's rocket company is giving employees a 20% pay increase if they volunteer to spend six weeks assisting its critical supercomputer buildout, according to an email seen by Business Insider.
"We now need leaders — current and emerging — to guide teams and remove blockers as we bring more supercomputers online," read the email, which was sent in early October to all SpaceX employees.
It specified that volunteers did not need to be managers already, adding that construction experience is a plus and that "drive matters most."
Employees who put themselves forward should expect to spend six weeks on-site in Memphis, Tennessee, or Southaven, Mississippi, where SpaceX is currently expanding its huge Colossus 1 and 2 data centers to meet surging demand for its compute business.
Volunteers "must be in good performance standing," with more than one year of tenure preferred, the email said. Employees who volunteer will receive a 20% premium on their base salary or on their hourly rate of pay for the period of their assignment, and be eligible for "bonuses tied to program success."
SpaceX did not respond to a request for comment.
The email described the reallocation of employees from other parts of SpaceX to assist the company's data center buildout as a "surge," a tactic employed by the company to divert employees and resources to mission-critical projects.
In 2022, CNBC reported that SpaceX offered employees pay bumps of between 10%-25% to temporarily relocate to Texas as it attempted to launch its Starship megarocket.
The company has been offering "surging" employees a 20% premium on their salary to move to Memphis since at least August, according to another email seen by Business Insider that called for "SpaceX experts and aces" to work for the next three months on the data center buildout. The email said the program is intended to end on December 31, 2026, but could be extended.
SpaceX will cover travel expenses and logistics, both emails said.
SpaceX's compute cash cowThe supercomputers in Tennessee and Mississippi, which were originally built by xAI before the startup was folded into SpaceX in February, have become a critical part of the company's business.
In SpaceX's earnings on Tuesday night, the rocket giant said AI revenue that includes leasing out its compute to other companies — including Anthropic and Google — had soared to more than $7 billion, nearly half SpaceX's entire quarterly revenue.
On the analyst call, CEO Elon Musk said that SpaceX was being "hounded relentlessly" by companies looking to rent out its compute, adding that they could have rented it out several times over.
SpaceX has been shifting executives in addition to rank-and-file employees to oversee its aggressive expansion. Business Insider previously reported that the company had placed a former Starship executive in charge of building out its compute capacity in Memphis.
Musk told investors on Tuesday he was also spending most of his time in the city as he looked to push SpaceX toward a target of bringing an extra 10 gigawatts of compute online by the end of 2027.
"I've been spending, personally, a lot of my time in Memphis, often four days a week," the SpaceX CEO said. He previously said he was living in an Airstream trailer on the site.
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Space Exploration Technologies Corp (NASDAQ:SPCX) CEO Elon Musk sees a path to $1 trillion in annual recurring revenue by the end of 2027, but his CFO's near-term forecast suggests a very different scale of business.
Elon Musk's Space Exploration Technologies (SPCX +7.00%) just delivered its second earnings report since becoming a publicly traded company. The results gave Wall Street plenty of reasons to celebrate.
As of this writing (Oct. 21), SpaceX stock is up roughly 10% as investors reassess the company's long-term potential. I think more investors are understanding how Musk's infrastructure conglomerate is swiftly becoming a diversified technology platform with multiple levers to generate recurring revenue and sustainable profits.
While the investment thesis around SpaceX is getting stronger, smart investors should be careful about chasing momentum right after an earnings report.
Image source: Getty Images.
SpaceX just delivered a monster earnings report
During the third quarter, SpaceX generated $14.6 billion in revenue, representing 161% year-over-year growth and 86% sequential growth. Even more encouraging, the company generated $4.4 billion in net income, compared with a loss of $1.1 billion during the same period last year.
As usual, one of the standouts was Starlink -- the satellite internet service powering SpaceX's connectivity segment. Quarterly revenue climbed 69% year over year to $5.2 billion, while operating income doubled to $2.4 billion. Starlink ended September with 13.6 million consumer subscribers, adding 1.6 million during the quarter alone. Importantly, Starlink's opportunity extends beyond residential internet.
Enterprise and government revenue surged 91% year over year to $2.1 billion, reflecting accelerating demand for satellite connectivity across commercial aviation, government agencies, and other industries. By the end of the quarter, more than 3,800 aircraft were equipped with Starlink. In addition, SpaceX is also developing Starlink Mobile, which could pave the way for satellite-to-phone connectivity and create another source of high-margin revenue.
SPCX Space Exploration Technologies$158.14+$10.35 (+7.00%)
NASDAQ · As of 3:03 PM ET 10/21/26
Artificial intelligence (AI) is becoming a major catalyst
For me, the most surprising development was the performance of SpaceX's super intelligence (SI) division. What was barely more than an idea at this time last year has suddenly become the company's largest business in terms of revenue. During the third quarter, SpaceX's SI revenue was $7.6 billion -- representing 830% growth year over year. Artificial intelligence (AI) services now account for more than half of SpaceX's total quarterly sales.
Much of this growth reflects SpaceX's expanding AI infrastructure. The company has secured a number of compute capacity agreements with hyperscale customers, including Google Cloud and Anthropic. Moreover, SpaceX expanded its capacity to 1.7 gigawatts, compared with 1.4 gigawatts last quarter and just 0.6 gigawatts a year earlier.
The company is also moving beyond infrastructure services through its Grok generative models and the acquisition of Cursor, an AI coding platform. Cursor contributed $608 million in revenue following the completion of the acquisition in August, while growing adoption of Grok Bot provides another opportunity to monetize AI.
The most important figure from the SI division is that it generated $431 million in operating income. To put this into perspective, this segment reported a $1.7 billion operating loss in the prior-year quarter. Indeed, profitability remains modest relative to SI's revenue. However, the improvement illustrates how SpaceX's AI ambitions are beginning to translate rapid top-line growth into profitable unit economics.
SpaceX's latest results highlight the advantages of its diversified business model. Starlink provides a reliable source of operating profits, while AI offers unusually high revenue potential given the ongoing infrastructure supercycle. Meanwhile, SpaceX's launch capabilities remain supportive to the expansion of both of these businesses.
With that said, investors shouldn't overlook the financial demands of SpaceX's growth. The company spent $19.6 billion on capital expenditures (capex) during the third quarter, the majority of which was dedicated to SI infrastructure. Since building advanced computing facilities requires enormous upfront capital outlays, operating profitability does not necessarily translate into positive free cash flow right away.
Nevertheless, I think SpaceX is becoming an interesting opportunity for investors seeking exposure beyond the usual AI semiconductor stocks and "Magnificent Seven." The caveat here is that blindly following an enthusiastic post-earnings rally is usually a setup for becoming a bag holder.
For patient investors, the more prudent approach is to accumulate a position in SpaceX stock gradually over time through dollar-cost averaging. This strategy will allow you to buy the stock over a long-term time horizon as opposed to trying to time the perfect entry point.
AST SpaceMobile (ASTS -0.97%) sank to a 52-week low of $39.02 on Oct. 20, just 12 days after SpaceX (SPCX +7.00%) agreed to acquire Grain Management's nationwide 800 MHz low-band spectrum portfolio for $8 billion. Let's see why that announcement torpedoed AST's stock -- and why investors might be overreacting to the news.
Why did SpaceX's move crush AST's stock?
AST SpaceMobile develops low Earth orbit (LEO) satellites for direct-to-cell connections. Its top customers include AT&T (T -5.64%) and Verizon (VZ -2.03%), and its satellites expand their cellular networks to remote areas that their terrestrial towers can't reach.
Image source: Getty Images.
AST has launched 13 of its BlueBird satellites so far, but it can't deliver stable cellular connections and generate recurring commercial revenue until it expands that constellation to at least 45 satellites. It expects to reach that target by early 2027, and gradually expand its constellation to 248 satellites over the long term. In addition to AT&T and Verizon, AST is working with dozens of other carriers to reach over 3 billion wireless subscribers worldwide.
In the past, AST and its clients didn't directly compete against SpaceX, which provided first-party satellite internet and broadband services through Starlink. But satellite signals can't penetrate walls and windows very easily, so Starlink relies on mid-band spectrum partners like T-Mobile (TMUS -2.78%) to reach those indoor dead zones.
By purchasing Grain's 800 MHz spectrum -- which previously belonged to T-Mobile -- and combining it with a constellation of over 10,000 active satellites (which are smaller than AST's satellite arrays), Starlink can evolve into a fully independent wireless carrier. That could spell trouble for AT&T and Verizon's slower-moving plans with AST SpaceMobile.
$40.73-$0.40 (-0.97%)
NASDAQ · As of 3:03 PM ET 10/21/26
Why was that sell-off an overreaction?
It made sense for AT&T and Verizon to get crushed by the news, but AST's decline is less rational. If AT&T, Verizon, and other carriers want to counter Starlink's latest move, they'll need to ramp up their spending on AST SpaceMobile's BlueBird satellites. They could also increase their investments in the company to accelerate those efforts.
Moreover, SpaceX isn't positioning Starlink as a competitor to AST. Instead, it will likely drive more carriers to partner with AST to expand their own satellite networks.
Therefore, I think AST's pullback was mainly due to overheated valuations rather than an existential threat to its business. Even after its recent decline, it still trades at 74 times this year's sales and 21 times next year's sales.
Analysts still expect AST's revenue to surge from $168 million in 2026 to $1.73 billion in 2028. If you believe it can hit those targets as it expands its constellation and gains new partners, it might be smarter to accumulate this volatile stock rather than sell the news.
Leo Sun has positions in Verizon Communications. The Motley Fool has positions in and recommends AST SpaceMobile. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.
Elon Musk dropped a revenue projection on SpaceX's latest earnings call that would put the company ahead of every business on the planet, and his CFO looked like he needed a moment to recover.
Elon Musk gave investors a striking new revenue projection. On the October 20, 2026 third-quarter earnings call for SpaceX (NASDAQ:SPCX | SPCX Price Prediction), Musk said: “I mean, in a nutshell, what this implies for SpaceX annual recurring revenue by the end of [2027] is somewhere between $500 billion and a trillion.”
He then added, “On that crazy note, I don’t want to give Bret a heart attack,” a reference to CFO Bret Johnson. Annual recurring revenue is a run rate: one period of current revenue annualized. It measures where the business is heading at a single moment, distinct from a full year of booked sales.
A Steep Climb From Today’s Run Rate On the same call, Bret Johnson said SpaceX remains on track for $100 billion in annual recurring revenue by the end of this year, defined as December revenue annualized. Third-quarter revenue came in at $14.6 billion, up 161% from $5.6 billion a year earlier. Reaching the low end of Musk’s range means the run rate has to grow again within roughly 12 months of SpaceX crossing $100 billion. Wall Street currently estimates SpaceX will book $315 billion in sales in 2028 and $626 billion by 2030, so as usual, Musk is thinking a lot more optimistically than consensus.
Compute and Grokbot Power Musk’s Math Musk tied the forecast to SpaceX’s AI expansion. Elon Musk said he “would be surprised if we brought on less than 13 gigawatts of compute by the end of next year.” Nameplate capacity was 1.7 gigawatts at the end of Q3. That compute already drives results: the superintelligence segment produced $7.6 billion in revenue and $5 billion in adjusted EBITDA.
Demand, by Musk’s account, exceeds supply. “We could rent out our compute several times over if we said yes to everyone,” he said, adding that contracts are “renewing at higher dollars per watt.”
The second driver is Grokbot. SpaceX said the agent had 800,000 paid weekly users earlier this month, more than doubling over the prior month. Musk said: “I think Grokbot may end up being what uses most of our superintelligence compute.”
How Musk’s $1 Trillion Compares to Amazon and Walmart The largest U.S. companies by revenue are Amazon (NASDAQ:AMZN), at $716.9 billion for 2025, and Walmart (NASDAQ:WMT), at $713.2 billion for the fiscal year ended January 2026. Elon Musk’s $1 trillion upper end would top both. This comparison sets a forward-looking run rate against revenue those companies have already reported. Wall Street believes Amazon will first top $1 trillion in revenue in 2028, when estimates for sales top $1.1 trillion.
What to Watch Before You Trust the Trillion Musk offered this range as his own projection on the call. SpaceX’s formal outlook is narrower: Bret Johnson guided Q1 2027 total revenue to $33 billion to $37 billion. Musk also tempered his compute plan: “I don’t expect everything to go right.”
Three milestones will show whether the trend holds:
Compute online. Management expects 2.5 to 3 gigawatts by the end of Q4. Delays there undermines everything. Year-end run rate. If SpaceX’s December revenue supports $100 billion, Musk’s starting point holds. Q1 2027 results. A result at or above the guided range would support the steep climb. A miss would push the trillion further out. Contact [email protected] for any questions or corrections.
SpaceX just told investors its AI compute pays back faster than almost anyone expected, and now Michael Burry is betting that confidence will crack. Two earnings reports in the coming weeks will decide who is right.
Last night, Chief Financial Officer Bret Johnson told investors on the third-quarter call for SpaceX (NASDAQ:SPCX | SPCX Price Prediction) that “At current pricing, new compute deployments are generating a payback of less than a year. Pricing is currently tracking slightly above the high end of the $30 to $50 per watt range we were discussing just last quarter.” Elon Musk, SpaceX’s founder, added that a six-month payback next year is “not impossible”.
That claim runs straight into Michael Burry’s short on Nebius Group (NASDAQ:NBIS). Nebius fell 14.53% over the past week and 20.9% over the past month. CoreWeave (NASDAQ:CRWV) fell 17.83% and 21.41%. In premarket trading on October 21, 2026, Nebius rose 3.13% to $176.81 and CoreWeave rose 2.91% to $63.94.
Shay Boloor noted SpaceX’s comment on X on October 20, 2026: “$SPCX says new AI compute deployments are generating “a payback of less than a year” with pricing now above $50 per watt”. His “above $50” is shorthand for Johnson’s “slightly above the high end.”
What SpaceX Actually Committed To
It is a management statement, without formal backing, about new installations at current prices. SpaceX did not disclose its cost per watt, utilization or depreciation assumptions. Musk hedged the six-month figure himself: “I’m not saying this will happen.” He also said SpaceX leases “at effectively the spot market rate”, so the payback depends on spot prices holding.
Read-Through for Nebius, CoreWeave and SpaceX
Nebius: CEO Arkady Volozh said Q2 deals yield $20 million to $25 million per megawatt, with prepayments covering 50% to 60% of capex. Volozh also cited short-term talks at $40 million to $50 million per megawatt and an auction that cleared 15% above its best Blackwell price. CFO Dado Alonso cited “less than a two-year payback period”. SpaceX’s figure backs up those numbers.
CoreWeave: CEO Michael Intrator said “Our near-term capacity remains effectively sold out.” CFO Nitin Agrawal cited an approximately 25% July price increase and backlog of $104.2 billion.
SpaceX: Its AI segment brought in $7.6 billion last quarter. SpaceX is also selling computing power, so this claim helps its own business.
Reality Check: Interest Bills Arrive Before Payback
Agrawal reported Q2 interest expense of $640 million and guided Q3 to $860 million to $940 million. Alonso’s $775 million asset-backed loan (debt secured by GPUs and signed cash flows) carries SOFR plus 250 basis points. These companies borrow first and earn later, so a price drop hits lenders and shareholders fast. HSBC (NYSE:HSBC) sees structural concerns for neoclouds. Truist Financial (NYSE:TFC) analysts still called SpaceX’s quarter the first data point this earnings season to support the bull case for AI cloud providers.
According to news reports, Burry added to his Nebius short in late September and then switched to put options. Put options gain value when a stock falls. He warned the AI bubble may burst “sooner than later.” The size of his position has not been disclosed. For readers considering whether to ride the AI trade or plan an exit, we wrote a free handbook on doing both.
Is Burry Wrong?
On demand, yes. Three operators report rising prices and fast paybacks. On timing, his risk is the balance sheet, and Nebius and CoreWeave will put that to a test soon. Both report third-quarter results in the coming weeks.
If CoreWeave tops Agrawal’s $3.45 billion to $3.6 billion range and Nebius holds Alonso’s $3 billion to $3.4 billion revenue and $7 billion to $9 billion run-rate guidance, it will provide near-term relief. The clearest signal against Burry would be Nebius per-megawatt pricing holding at or above its Q2 levels while prepayments cover more of the build. If prices slip or prepayments cover less, his case gets stronger. Another area to watch is interest rates and CDS spreads for neoclouds. While near-term business may be exceptional, CDS spreads are a better measure of long-term concerns from the market.
Contact [email protected] for any questions or corrections.
Several exchange-traded funds (ETFs) have gobbled up shares of Space Exploration Technologies (SPCX +9.94%) since it went public on June 12, 2026. But while major ETFs like the Vanguard Morningstar Total Stock Market ETF and the Vanguard Morningstar Growth ETF have barely increased their holdings since June, the Vanguard Communication Services ETF (VOX -0.29%) has consistently added shares every month.
In fact, SpaceX is now the seventh-largest holding in the Vanguard Communication Services ETF. As of Sept. 30, the ETF now holds 1,209,387 SpaceX shares, up from 1,170,398 shares as of Aug. 31, 842,835 shares as of July 31, and 632,077 shares as of June 30.
Here's why investors can expect the Vanguard Communication Services ETF to continue buying SpaceX shares, and why the ETF remains a top buy now.
Image source: Getty Images.
SpaceX's Float isn't anywhere close to 13.18 billion shares
Despite having a $1.93 trillion market cap, SpaceX is still not a top holding in many growth-focused and general market ETFs because the percentage of shares available for trading on the Nasdaq exchange (called the float) is still a relatively small percentage of SpaceX's total share count. SpaceX sold 639 million shares during its June initial public offering. It has since unlocked about 2.3 billion shares in total. But that's still just 17.5% of SpaceX's outstanding share count of 13.18 billion.
As more SpaceX shares become unlocked, SpaceX's float will increase, and so will its float-adjusted weighting in the Nasdaq-100 index, which is the 100 largest non-financial stocks by market cap in the Nasdaq Composite (^IXIC +0.99%). In turn, ETFs benchmarked to the Nasdaq-100 or that use float-adjusted weighting systems will increase their SpaceX holdings.
SPCX Space Exploration Technologies$162.49+$14.70 (+9.94%)
NASDAQ · As of 12:32 PM ET 10/21/26
SpaceX is one of the three largest communication stocks
Among ETFs buying SpaceX stock, the Vanguard Communication Services ETF will likely remain one of the most aggressive, as it is a sector-based fund. Meaning that it only invests in communication stocks, which includes Alphabet (NASDAQ: GOOG) (GOOGL -2.17%) and Meta Platforms (META +2.42%) but excludes mega cap giants like Nvidia, Apple, Microsoft, and Amazon that you'd find in other growth-focused ETFs and general market ETFs.
Because Vanguard classifies SpaceX as a communications stock, the Vanguard Communication Services ETF is the only Vanguard sector ETF that will buy SpaceX. And because SpaceX's market cap is so large, it would become a top-three holding in the ETF if it were weighted by market cap rather than float-adjusted. This dynamic is why SpaceX has ascended to the seventh-largest holding in the Vanguard Communication Services ETF in a matter of months.
Alphabet and Meta Platforms are 47% of the Vanguard Communication Services ETF
The Vanguard Communication Services ETF is a great buy for investors looking to build a portfolio around Alphabet, Meta Platforms, and SpaceX. Alphabet and Meta Platforms currently make up a whopping 47% of the fund.
Adding the full weight of SpaceX's market cap to the mix will make the ETF even more top-heavy and growth-oriented. But the ETF will likely still have a reasonable valuation given that Alphabet and Meta Platforms feature forward P/E ratios of 25.9 and 23.4, respectively. What's more, the communications sector has significant weightings in value-focused industries like telecommunications and legacy media. These qualities make the Vanguard Communication Services ETF uniquely positioned to absorb the high-risk, high-reward nature of making SpaceX a top holding.
Daniel Foelber has positions in Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Vanguard Morningstar Growth ETF. The Motley Fool has a disclosure policy.
Despite macroeconomic and geopolitical pressures, the stock market has been hot this year. The S&P 500 is up roughly 12% in 2026, and the Nasdaq Composite is up roughly 12.5%. Gains over the last five years look even more striking. Over the last half-decade, the S&P 500 and the Nasdaq Composite are up 71% and 74%, respectively.
On the other hand, the stock market has recently looked a bit wobbly as investors weigh risks from persistent inflation, high bond yields, elevated valuations, financing concerns for artificial intelligence companies, and other factors.
While it's impossible to say with any certainty that a market crash is near, a crash occurring at some point is an inevitability -- and buying these two space stocks below in a huge pullback for the market could be a great move.
Image source: Getty Images.
1. SpaceX Space Exploration Technologies (SPCX +9.94%), or SpaceX, has one of the most growth-dependent valuation profiles of any company on the market. Following its $18.7 billion in sales last year, the average analyst target is calling for the business to post revenue of roughly $45 billion this year -- good for annual growth of roughly 141%.
SpaceX's current rate of sales growth is impressive, but it must also be viewed in the context of the company's roughly $1.92 trillion market capitalization. The company is trading at roughly 43 times this year's expected sales. The business is also currently operating at a loss, and capital expenditures are likely to continue surging as Elon Musk's company builds out its AI infrastructure, supports the Terafab chip manufacturing project, and pursues other projects.
The company is expanding rapidly and has promising avenues for long-term growth, but its current valuation profile carries significant risk. If a market crash were to occur and substantially reduce its valuation, I would seize the opportunity to build a position in a highly innovative company at a discount.
SPCX Space Exploration Technologies$162.49+$14.70 (+9.94%)
NASDAQ · As of 12:32 PM ET 10/21/26
2. Rocket Lab Rocket Lab is a leading player in rocket launch services, trailing only SpaceX in the category. Like SpaceX, Rocket Lab is growing quickly but trades at a valuation that also already prices in a lot of future wins.
Rocket Lab grew revenue by roughly 62% year over year in the second quarter to approximately $234 million. Meanwhile, the company has a market capitalization of roughly $30.4 billion and is valued at approximately 32 times this year's expected sales.
The company is also still posting sizable net losses and will likely continue to do so for the foreseeable future. A potential shift into profitability likely hinges on continued economies of scale that can improve gross margins and operating efficiency.
In other words, Rocket Lab has the kind of valuation profile that could put its stock at risk for a huge pullback in the event of a market crash. On the other hand, the company has already proven that its rockets provide a reliable, cost-effective way to get payloads into orbit -- and a dramatic contraction in its share price would be a buying opportunity.
This is a fair market value price provided by Massive. Learn more.
$104.83▼
$225.64$234.33
SpaceX NASDAQ: SPCX gave Wall Street just four days' notice before releasing its third-quarter earnings, catching investors off guard with an unusually short announcement window. The aerospace industry giant then delivered another surprise: Earnings of 35 cents per share easily beat the 10-cent consensus estimate, while quarterly revenue surged 161% year over year to $14.58 billion.
What makes this earnings report compelling is how SpaceX is financing its pivot into artificial intelligence (AI). The Super Intelligence segment generated over $7.5 billion in revenue, showing that newly deployed compute capacity and AI products are generating substantial revenue. Management also guided for around $35 billion to $40 billion in companywide fourth-quarter capital expenditures.
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Igniting the Bottom Line: Profitability Meets ExpansionAchieving profitability during an aggressive infrastructure expansion is a rare feat. SpaceX reported about $14.58 billion in total revenue, up roughly 161% year over year. The standout driver was the Super Intelligence unit, which generated around $7.56 billion in the quarter. This represents a substantial jump from the roughly $2.56 billion reported in the second quarter. The rapid commercialization of compute capacity, which reached around 1.7 gigawatts by the end of September, suggests cloud service contracts are absorbing new supply.
The quarter also included the integration of Cursor, following an acquisition that carried an implied equity value of around $60 billion. Cursor contributed roughly $608 million to the top line while introducing about $1.22 billion in acquisition-related share-based compensation. Add in approximately $675 million in interest expenses, and the ability to post positive net income highlights a durable operating model. High-margin segments are effectively absorbing the friction of rapid expansion, allowing SpaceX to demonstrate bottom-line resilience even as the aerospace leader scales new business units.
Escape Velocity: Revenue Outpaces Infrastructure SpendA critical metric for evaluating high-growth infrastructure plays is the relationship between capital expenditures and revenue generation. In the second quarter, SpaceX spent roughly $18.37 billion on capital expenditures against about $7.81 billion in revenue, yielding a ratio near 2.35x. In the third quarter, capital expenditures ticked up to roughly $19.59 billion, but revenue of $14.58 billion compressed that ratio to about 1.34x.
This sequential compression suggests that SpaceX's overall revenue is growing faster than its capital spending. Artificial intelligence revenue is scaling rapidly, although the companywide figures do not isolate the costs of building its data centers. Management expects fourth-quarter capital expenditures to accelerate to $35 billion to $40 billion as SpaceX deploys V3 satellites, scales Starship development, and expands its compute footprint.
Under normal circumstances, a $40 billion quarterly capital outlay might trigger alarms regarding debt service and balance sheet fatigue. The recent initial public offering fundamentally altered the SpaceX liquidity profile. The IPO generated approximately $85.7 billion in net proceeds, and SpaceX ended September with $51.3 billion in cash and cash equivalents and another $38.6 billion in marketable securities. This liquidity lets SpaceX fund fourth-quarter ambitions without immediately stressing debt markets or forcing unfavorable financing terms.
The Heavy Lift Booster: Starlink Subsidizes AI GrowthWhile the compute infrastructure commands the headlines, the legacy space and connectivity segments are the financial bedrock supporting these endeavors. The connectivity segment, driven by Starlink, delivered about $5.25 billion in revenue and operates at an estimated 55% gross margin.
The consumer broadband base expanded to about 13.6 million subscribers, while enterprise and government revenues jumped 91% year over year.
Aviation contracts are also scaling, with thousands of aircraft currently equipped with satellite terminals. These high-margin recurring revenues provide the operational cash flow necessary to subsidize the capital-intensive Super Intelligence buildout. SpaceX is essentially using its dominance in low Earth orbit to help fund its terrestrial data center ambitions.
Management is also laying the groundwork for an expanded total addressable market. A recent agreement to acquire a portfolio of 800 MHz spectrum licenses positions Starlink Mobile to operate directly as a primary U.S. mobile carrier, although the deal still requires regulatory approval and additional infrastructure investment.
Transitioning from a fixed broadband and aviation provider into the broader telecommunications market could unlock entirely new revenue streams. By establishing a direct-to-device network, SpaceX creates a potential pipeline of recurring revenue to support the cash flow needed in the coming years.
Current Price$161.72High Forecast$800.00Average Forecast$233.50Low Forecast$75.00SpaceX Stock Forecast Details
Looking beyond the immediate capital expenditure cycle requires visibility into future cash flows. SpaceX reported a total backlog of approximately $63 billion, with roughly $42 billion expected to be recognized over the next 12 months.
This contracted revenue provides a high degree of predictability for the coming quarters, helping reduce uncertainty surrounding anticipated spending. For fundamental analysts, a backlog of this magnitude signals that enterprise demand is not just theoretical but firmly committed.
Management leveraged this visibility to issue aggressive forward guidance, projecting first-quarter 2027 revenues between $33 billion and $37 billion. This forecast directly challenges concerns that the artificial intelligence compute market might face a near-term plateau.
If SpaceX hits these targets, it would provide further evidence that enterprise demand for inference and training compute remains robust, validating the heavy front-loaded investments and easing concerns about long-term payback periods.
Mission Control: SpaceX’s Next Phase of GrowthThe third-quarter earnings report presents a clear picture of an enterprise successfully navigating a complex growth phase. On one side, improving profitability and a rapidly expanding total addressable market are driving record revenues.
On the other side, the sheer scale of the required capital expenditures demands flawless execution. The compression in the capital expenditure-to-revenue ratio offers a strong signal that the underlying strategy is working as intended.
Investors evaluating the aerospace and telecommunications sectors may view the recent earnings report as a confirmation of SpaceX's operational leverage. Those monitoring SpaceX might prefer to watch how effectively the fourth-quarter capital deployment translates into the projected 2027 revenue targets before adjusting their allocations. The foundational elements are in place, but executing a $40 billion infrastructure deployment will be the ultimate test of operational discipline.
Should You Invest $1,000 in SpaceX Right Now?Before you consider SpaceX, you'll want to hear this.
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Space Exploration Technologies (SPCX +9.77%), more popularly known as "SpaceX," rocketed 9% higher through 10:55 a.m. ET Wednesday after crushing its Q3 earnings report last night.
Heading into the report, analysts had forecast that Elon Musk's recently IPO'd space-'n'-AI company would earn just $0.16 per share for the quarter.
SpaceX actually earned $0.35 per share -- more than double what Wall Street expected.
Image source: The Motley Fool.
Revenue at the company's renamed "Super Intelligence" (nee "Artificial Intelligence" or "AI" -- so now, "SI") division exploded 830% higher, soaring to $7.6 billion. Connectivity -- once SpaceX's biggest business -- grew 69% to $5.2 billion. Space -- the division that gave SpaceX its name -- inched just 6% higher to $1.8 billion.
Total revenue at SpaceX increased 161% to $14.6 billion.
SpaceX's earnings news was arguably even better. The company's Connectivity division, until now SpaceX's only profitable division, increased its profit 99% year over year to $2.4 billion. SI flipped from unprofitable to profitable, earning $431 million for the quarter. Curiously, the Space division flipped the other way; it earned $259 million in last year's Q3, but lost $7 million this time around.
(This may be because of an accounting quirk at SpaceX, which "does not recognize any inter-segment revenue" in the Space division for launches of Starlink satellites for the Connectivity division.)
SPCX Space Exploration Technologies$162.23+$14.44 (+9.77%)
NASDAQ · As of 12:28 PM ET 10/21/26
What's next for SpaceX stockNot all of SpaceX's news was good, of course. While SpaceX's instinct will certainly be to emphasize the surprising profitability of its AI (sorry -- its "SI") business, capital investment in SI remains a drain on cash. SI capex more than tripled year over year to $16.4 billion in Q3. So far this year, SpaceX's total capex is $48.1 billion, and its total cash burn is $35 billion -- on course for $47 billion.
I remain uninterested in buying SpaceX stock.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of SPCX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
SpaceX Corp (NASDAQ:SPCX) is becoming an AI infrastructure company that also happens to launch rockets, according to analysts.
The market rewarded the shift Wednesday, sending shares up more than 10% after third-quarter results beat estimates in each of its three segments.
The numbers explain the reaction. Revenue in the AI infrastructure segment (SI) reached $7.6 billion, versus $2.6 billion a quarter earlier and a Street forecast of $6.5 billion. EBITDA of $5 billion, against $4 billion expected, came at a 66% margin, up from 45% in the prior quarter.
UBS attributed the jump to a full run-rate contribution from the Anthropic deal, an initial contribution from Google and the close of the Cursor acquisition.
Company-wide, revenue grew 161% from a year earlier, and SpaceX swung to a $4.4 billion profit from a $1.1 billion loss.
The forward guidance matters more than the quarter. SpaceX now targets 13 gigawatts of compute by the end of 2027, against the 2.5 to 3.0 gigawatts UBS had modelled and the 1.7 gigawatts in place at quarter end.
Elon Musk said he was “hounded by every hyperscaler” to lease more capacity and that demand could absorb several times what the company has, with upside to 20 gigawatts depending on power generation. He also expects spot rental rates to keep rising, which could cut payback periods to about six months next year.
UBS said the build, split roughly 50:50 between held and leased capacity, would support annual recurring revenue of $0.5 trillion to $1 trillion by the end of 2027, up from an expected $100 billion at the end of 2026.
The cost of getting there is the central debate. SpaceX guided to fourth-quarter capital expenditure of $35 billion to $40 billion, roughly double the $19.6 billion spent in the third quarter and well above UBS’s $19 billion estimate.
UBS calculates that reaching 13 gigawatts requires about $350 billion in total spending, which puts SpaceX alongside Alphabet at roughly $380 billion and Microsoft at roughly $230 billion.
Swissquote’s Ipek Ozkardeskaya cited S&P Global Visible Alpha figures showing capex of nearly $70 billion this year, climbing to almost $197.4 billion in 2028. “Great growth comes at a big cost,” she wrote.
Funding capacity may prove a competitive edge. Ozkardeskaya pointed to stress among smaller AI infrastructure providers, noting that CoreWeave’s 8.5% bond due in 2032 now yields almost 15%, while SpaceX’s 2033 bond yields less than half that. In her view, if credit conditions tighten, SpaceX could absorb business from weaker rivals.
Elsewhere, Starlink added 1.6 million subscribers, short of UBS’s 2.3 million forecast, and average revenue per user fell 17% to $69, though management expects higher fourth-quarter volumes.
Space revenue of $1.77 billion and EBITDA of $357 million beat consensus, which had called for an EBITDA loss of $46 million, even as revenue growth slowed to 6% amid the shift from Falcon 9 to Starship.
Starship Flight 14, the program’s first orbital and revenue-generating mission, deployed 26 Starlink V3 satellites, roughly 10 times a Falcon 9 mission’s downlink capacity.
Management is targeting weekly flights in the first half of 2027, which would imply up to 72 launches in the year against UBS’s estimate of 30 and the Street’s 40. It plans a ship and booster catch attempt on Flight 15 next month.
UBS, which has a Buy rating, raised its price target to $230 on higher segment estimates. The target is based on a sum-of-the-parts valuation that implies 28 times 2028 EBITDA.
Ozkardeskaya was more measured on valuation. “It’s hard to tell whether this is expensive or cheap,” she said, adding that the answer depends on how much investors believe in Musk’s ability to execute.
A Tesla combination adds another variable. Musk said special committees have been formed to evaluate a transaction, but he is recused and limited in what he can say. He said there was “a lot of merit” in combining the companies but that a deal was by no means inevitable.
Ozkardeskaya said investors could reject a deal unless the synergies create value for both sides.
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SpaceX (SPCX +11.94%) reported its third-quarter earnings on Oct. 20, and the results beat analyst expectations throughout the business. SpaceX produced revenue, earnings, and adjusted EBITDA that handily exceeded what analysts had been looking for, but that doesn't come close to telling the full story.
With that in mind, here are five numbers from SpaceX's earnings that investors should pay attention to.
1. Revenue nearly doubled sequentiallyNot only did SpaceX produce $14.6 billion in revenue, which came in well ahead of expectations, but this was nearly double what the company reported just three months prior. Much of this can be attributed to the company's AI compute deals taking effect. Plus, growth is starting to show up on the bottom line, with $2.8 billion in operating income versus a $273 million loss a year ago.
Image source: SpaceX.
2. AI was more than half of the revenueSpaceX's AI business (now known as the Super Intelligence segment) generated $7.6 billion in revenue during the third quarter, more than half of the company's total. This includes the Grok AI models, the recently acquired Cursor coding company, and the company's cloud computing services. For context, Cursor contributed about $600 million to the total revenue, so most of it came from the existing AI business.
3. 1.6 million new Starlink subscribersStarlink ended the quarter with 13.6 million consumer subscribers, up 89% from a year ago. 1.6 million of them were added in the third quarter alone. Although average revenue per customer was $69 per month, down from $83 a year ago, this was by design, as the company is growing in lower-priced international markets and offering cheaper plans.
SPCX Space Exploration Technologies$165.44+$17.65 (+11.94%)
NASDAQ · As of 10:02 AM ET 10/21/26
Starlink is the most profitable part of SpaceX's business, earning $2.4 billion in operating income on $5.2 billion in revenue, a stellar 45% operating margin.
4. Compute capacityAt the end of the second quarter, SpaceX reported 1.4 gigawatts of compute capacity. Just three months later, it has surpassed 1.7 gigawatts, putting the company on track to exceed 2 GW by the end of the year. Based on the midpoint of its pricing range, 1 GW of new capacity would be worth about $40 billion in annual revenue, so if this build-out stays on track, it could be a massive growth driver.
5. Capex is growingIt shouldn't come as too much of a surprise, but building gigawatts of compute capacity is expensive. SpaceX spent $19.6 billion on capex in the third quarter, $16.4 billion of which was spent on AI computing. So far in 2026, SpaceX's capital spending exceeded operating cash flow by about $35 billion.
To be sure, with about $90 billion in cash and securities on its balance sheet and less than $40 billion in debt, the company is in an excellent financial position to afford the build-out. But with CEO Elon Musk previously stating that the company should be closer to 10 GW than 5 GW by the end of 2027, the capex numbers could get significantly larger.
The bottom lineBy virtually all metrics, this was an excellent quarter for SpaceX. The business is growing much faster than analysts expected, Starlink is turning into a cash machine, and the AI segment's revenue is growing rapidly. If the company's massive AI spending continues to pay off, SpaceX could continue to grow its top line rapidly for years to come.
Of course, SpaceX isn't a cheap stock at 93 times forward earnings. It might be a good idea to limit position sizing and expect elevated volatility as the growth story plays out. But there's not a lot to dislike in the numbers SpaceX just reported, and its rapid growth could result in a far more palatable valuation in the not-too-distant future.
Space Exploration Technologies Corp., aka SpaceX, delivered a standout Q3, with revenue up 161% year over year to $14.58 billion and a swing to profitability. Super Intelligence became SPCX's largest segment, posting $7.6B revenue and a $431M operating profit, driven by cloud deals and the Cursor acquisition. Management guided 1Q27 revenue to $33 billion–$37 billion, far above consensus, and backlog surged to $63B, supporting a robust forward outlook.
