SpaceX stock soars on runaway profits that see revenue rise 161% – as Musk talks Tesla merger

Shares of SpaceX jumped after hours Tuesday after the rocket and satellite giant reported a whopping 161% increase in quarterly revenue — fueled by an AI business that overtook its Starlink internet service as the company’s biggest revenue source.

The results came as rumors of a possible SpaceX-Tesla merger spread — and Elon Musk, the CEO of both companies, said during an earnings conference call that the companies had formed special committees of independent directors to discuss a possible union “at the request of shareholders.”

The multi-billionaire, who said he could not participate in the negotiations due to conflicts of interest, nevertheless expressed support for a deal.

“Do I think this would be a good idea? Yes,” Musk said, adding that shareholders would ultimately have to approve it.

SpaceX raked in $14.58 billion in third-quarter sales, with about $7.6 billion coming from its fast-growing AI division, according to its latest results.

That compares to about $5.2 billion generated by its Starlink-led connectivity business — a stark change from 2025, when the division accounted for 61% of the company’s revenue.

SpaceX also reported net income of about $4.4 billion, compared with a loss of $541 million in the previous quarter, while adjusted earnings before interest, taxes, depreciation and amortization climbed to about $8.8 billion.

SpaceX shares jumped 4% to $154 after hours Tuesday, following a regular session close of $147.79.

The earnings blockbuster came four months after SpaceX completed its historic IPO in June, which raised about $85.7 billion in net proceeds and valued the company at about $1.75 trillion.

As of Tuesday’s closing price, SpaceX had an estimated market capitalization of $2.01 trillion, about 13 times that of Boeing and 16 times that of Lockheed Martin.

The latest results highlight how quickly SpaceX has evolved beyond its traditional rocket launch business since acquiring xAI in February.

The company’s AI division, which includes chatbot Grok, social media platform X and a growing cloud computing business, accounted for about 52% of third-quarter revenue.

That’s up from $2.56 billion in the second quarter and just $818 million in the first three months of the year.

Much of this explosive growth is due to leasing computing capacity to outside clients, turning AI infrastructure into the company’s fastest-growing revenue stream.

SpaceX CEO Elon Musk told investors after Tuesday’s earnings release that “the constraint on superintelligence deployment is more in power, cooling and infrastructure than in chips.”

He compared SpaceX’s ability to build this infrastructure to “the New York Yankees playing Little League,” boasting that his team could eventually advance faster than all of its competitors combined.

Musk said he spent “often four days a week, night and day” in Memphis, home to a massive AI center, working on bringing the company’s second supercomputer cluster online.

SpaceX previously disclosed $14.1 billion in AI cloud contract sales, although that figure includes some already recognized revenue and does not equate to its remaining backlog.

Starlink, meanwhile, continued to generate strong results despite losing its position as the company’s top revenue generator.

Connectivity revenue increased about 69% from the previous year, while operating profit reached about $2.4 billion.

Starlink’s subscriber base increased to 13.6 million, up from 12 million at the end of the second quarter.

The satellite Internet service has proven to be a very profitable operation, generating $4.42 billion in operating profit on $11.39 billion in revenue last year, an operating margin close to 39%.

Musk told investors that he expects Starlink to have “about a hundred times the bandwidth of the current Starlink constellation” within about three years, as SpaceX deploys more powerful satellites.

He said the company’s latest Starship mission, which put 26 Starlink satellites into orbit, provided the bandwidth equivalent to 10 Falcon 9 launches.

But the company’s meteoric growth comes with an equally exorbitant price tag.

SpaceX spent approximately $19.6 billion in capital expenditures during the third quarter, including approximately $16.4 billion spent on AI infrastructure.

Musk said SpaceX expects to attempt to catch both the Starship booster and the spacecraft during Flight 15 next month — a feat he described as “a major technological milestone.”

“I would say it’s more likely than not that this will be successful on the next flight,” the tech titan told investors, adding that SpaceX plans additional Starship launches through the end of the year.

He predicted the company could begin launching Starship weekly in the first half of next year, and potentially ramp up to twice weekly in the second half.