SpaceX (SPCX) soared on Wednesday, delivering its strongest performance in two months after blockbuster quarterly earnings and fresh merger discussions with Tesla reignited investor enthusiasm. Shares of Space Exploration Technologies (SPCX) jumped nearly 11% to around $164, extending a sharp rebound after several weeks of volatility.
The rally comes as investors reassess the company's growing artificial intelligence business, which is rapidly becoming a major revenue driver alongside its established space and satellite operations. While other space stocks have struggled throughout October, SpaceX's earnings beat and ambitious growth outlook are giving Wall Street new reasons to pay attention.
SpaceX Earnings Blow Past Wall Street Expectations
SpaceX reported third-quarter revenue of approximately $14.6 billion, a 161% increase from a year earlier and comfortably above analysts' expectations of roughly $12.9 billion. The company posted its first quarterly net profit of $4.4 billion, reversing a $1.1 billion loss a year earlier. Earnings reached $0.35 per share, well above consensus estimates, while adjusted EBITDA climbed to $8.8 billion.
Much of that growth came from SpaceX's expanding Super Intelligence business, which generated approximately $7.6 billion in quarterly revenue. The segment now accounts for more than half of total sales, reflecting the company's transformation into a major player in AI computing infrastructure. Its connectivity business also continued growing, supported by Starlink's expanding consumer, enterprise and government customer base.
Elon Musk Opens the Door to a Tesla Merger
Adding to Wednesday's excitement, CEO Elon Musk confirmed that SpaceX and Tesla have established independent special committees to evaluate a potential merger. The proposed combination could bring together Tesla's electric vehicles, robotics and chip development with SpaceX's satellite network, launch capabilities and expanding AI operations.
Musk has expressed support for the idea but emphasized that a deal is far from guaranteed. Any agreement would require approval from the companies' independent committees and shareholders, including a particularly demanding voting threshold at Tesla. Tesla shares also climbed more than 3% Wednesday as investors considered the possibility of combining two of Musk's largest businesses.
AI Expansion Comes With a $40 Billion Price Tag
Despite its impressive earnings, SpaceX's spending plans are drawing scrutiny. The company expects fourth-quarter capital expenditures of $35 billion to $40 billion, nearly double the $19.6 billion spent during the third quarter. Much of that investment will support AI computing capacity, Starship development and its next-generation Starlink network.
The aggressive expansion comes as Wall Street grows increasingly concerned about the enormous costs of building AI infrastructure. However, SpaceX enters this spending cycle with a substantial contracted revenue pipeline. Management reported a $63 billion backlog at the end of September, including approximately $42 billion expected to convert into revenue over the following 12 months. The company also projected first-quarter 2027 revenue of $33 billion to $37 billion, signaling confidence that its investments can translate into continued growth.
Space Stocks Rebound, but SpaceX Remains the Standout
Wednesday's rally extended beyond SpaceX, with newer space companies including Intuitive Machines, Firefly Aerospace, Rocket Lab and AST SpaceMobile recovering from recent declines. Still, the gap between SpaceX and its smaller competitors remains striking.
Through Tuesday, SpaceX had lost only about 2% in October, while the typical newer space stock had declined approximately 26%. The difference highlights investors' preference for companies with established revenue streams and stronger financial resources during periods of market uncertainty.
SpaceX's stock has also shown resilience around important technical levels. Shares recently found support between $146 and $148 before Wednesday's jump above $160. Investors are now watching the $172 level, where previous rallies stalled. A sustained move above that resistance could bring the stock's June highs near $210 back into focus.
Looking Ahead
SpaceX faces an immediate test Thursday, when as many as 1.3 billion shares become eligible for trading following the expiration of a post-IPO lockup. The additional supply could create short-term volatility, particularly after Wednesday's sharp rally. Beyond that, investors will be watching Tesla's earnings, developments surrounding the potential merger and SpaceX's ability to execute its ambitious AI expansion without sacrificing profitability. With revenue accelerating and spending set to surge, the company's next challenge is proving that its extraordinary growth can justify the enormous investment required to sustain it.
