SpaceX reported a record third-quarter profit of $4.4 billion on Tuesday, marking a significant turnaround from a $1.1 billion loss in the same period last year. Revenue surged 161% to $14.6 billion, far exceeding analyst estimates of $12.72 billion, according to data compiled by LSEG. The company’s shares rose nearly 5% in after-hours trading following the announcement.
Elon Musk confirmed discussions about a potential merger with Tesla, revealing that both companies have formed special committees to explore the possibility. Musk, who serves as CEO of both firms, stated that a combination could enhance collaboration on AI software, chip design, and space-based computing. However, he emphasized that no terms have been agreed upon and that any deal would require approval from a majority of Tesla shareholders, calling it a "quite a high hurdle." Musk also recused himself from committee discussions due to a conflict of interest.
The financial performance was driven primarily by AI revenue, which rose more than ninefold to $7.6 billion, largely from renting out computing capacity to developers such as Anthropic, Google, and Reflection AI. SpaceX’s capital expenditures totaled $19.6 billion, with $16.4 billion allocated to AI infrastructure, a level the company expects to maintain in the near future. While Starlink and connectivity operations remain the company’s financial backbone, Musk highlighted an "inflection moment" across SpaceX’s launch, connectivity, and superintelligence divisions.
Musk noted that SpaceX’s own AI models, including xAI’s Grok, have yet to match the prominence of rivals like OpenAI, Anthropic, and Alphabet’s Google. The company’s AI business currently operates more like a cloud provider than a traditional AI lab, focusing on data-center capacity rentals rather than proprietary models. Meanwhile, Starlink’s expansion continues, with recent acquisitions of nationwide low-band spectrum positioning the service to compete with U.S. mobile carriers.
Investor questions ahead of the earnings call reflected growing interest in SpaceX’s AI strategy and long-term plans for Starship’s lunar lander hardware. Retail investors also pressed for updates on the company’s progress in developing key technologies, such as orbital refueling, which remains unproven. Analysts, meanwhile, focused on the sustainability of AI spending and the potential for multi-year revenue commitments.
SpaceX’s latest earnings report marks its second quarterly disclosure since going public in June, following a $7.8 billion revenue figure in the second quarter that failed to offset costs. The company’s valuation stands at nearly $1.95 trillion, underscoring its dominant position in aerospace and emerging AI infrastructure. While Musk’s vision for superintelligence and interplanetary travel garners attention, the immediate financial gains are being driven by AI cloud services and satellite internet.