SpaceX is no longer just a rocket and satellite internet company. Third-quarter results released by Elon Musk’s company on Tuesday after U.S. markets closed showed that artificial intelligence now generates the most money for it. Revenue jumped 161 percent year over year to $14.6 billion, and the company posted a solid profit for the first time since going public. The Super Intelligence division, as SpaceX now calls its artificial intelligence business, generated more revenue on its own than Starlink and space transportation combined.
From a loss to billions in profit
Analysts expected revenue of roughly $12.7 billion to $13 billion. SpaceX beat their estimates by more than $1.5 billion. The company exceeded profitability expectations by an even wider margin. Net profit reached $4.4 billion, compared with a loss of $1.1 billion in the same period a year earlier. Earnings per share amounted to 35 cents, while the market had expected roughly 13 to 16 cents. EBITDA, operating profit before depreciation, interest, and taxes, rose 306 percent to $8.8 billion.
The pace of growth is also evident compared with the previous quarter. In the second quarter, when SpaceX disclosed its financial results for the first time, it generated just under $7.8 billion in revenue. Revenue therefore nearly doubled in three months.
AI earns more than the rest of the company
The Super Intelligence division includes cloud services, language models, and applications such as the Grok chatbot. The division generated $7.56 billion in revenue, up 830 percent year over year, and became the largest part of the entire company for the first time. According to the company, growth was driven primarily by newly launched major cloud service contracts, the integration of the Cursor programming tool, which SpaceX acquired in the middle of the year, and the growing use of Grok models.
The new Grok Bot personal assistant also contributed significantly to the success. During the call with analysts, Musk described it as the fastest-growing product he had ever seen.
The AI division is not only consuming money but also making it. Its profit reached $5 billion, representing more than half of the entire company’s result.
Tens of billions for data centers
But this growth comes at an enormous cost. SpaceX invested $19.6 billion during the quarter, with more than $16 billion going into artificial intelligence infrastructure, including the expansion of the Colossus supercomputing centers. The company’s computing capacity reached 1.7 gigawatts at the end of September. It stood at 1.4 gigawatts in June and just 0.6 gigawatts a year earlier.
Management has no intention of slowing down. It wants to have 2.5 to 3 gigawatts available by the end of the year and also discussed a path toward 13 gigawatts or more by the end of 2027. In the fourth quarter, it plans to invest $35 billion to $40 billion, primarily in computing capacity in Memphis and Southaven. Musk described interest from the largest cloud operators and other customers as relentless. According to him, computing prices make it possible for investments to pay for themselves in less than a year, and in some cases perhaps in as little as six months.
The company has plenty of money. It ended the quarter with roughly $90 billion in cash and readily marketable securities. Chief Financial Officer Bret Johnsen emphasized that the combination of a leading position in rockets, recurring revenue from Starlink, and the rapidly growing AI division gives the company significant operating leverage. He also promised that SpaceX would manage its capital prudently.
The outlook surprised even optimists. SpaceX expects revenue of $33 billion to $37 billion in the first quarter of 2027, while analysts had forecast roughly $22 billion.
Starlink grows, rockets keep pace
The connectivity segment, primarily Starlink, generated $5.25 billion in revenue. It improved by 69 percent year over year and by 22 percent compared with the previous quarter. The number of consumer subscribers climbed to 13.6 million, up 89 percent from a year earlier, with 1.6 million added in the last three months alone. Average revenue per customer rose to $69. The company is also performing well with corporate and government customers. Starlink is now used aboard more than 3,800 aircraft.
The space division generated $1.77 billion. This represents growth of only 6 percent year over year, but 84 percent compared with the previous quarter. The main event was the Starship Flight 14 mission, the first mission of the giant rocket for which SpaceX was paid. Starship carried 26 third-generation Starlink satellites into orbit, adding roughly ten times more transmission capacity than a typical Falcon 9 launch. In total, the company conducted 35 launches during the quarter, including 12 for customers, among them the Nancy Grace Roman Space Telescope mission for NASA.
During the call, management also raised the possibility of a merger with Tesla. SpaceX has established special committees to examine this option.
Shares and analysts
SpaceX shares, traded under the ticker SPCX, closed Tuesday’s trading at $147.79. Following the release of the results, they gained approximately 1.6 percent in after-hours trading and jumped roughly 8 percent on Wednesday morning before the market opened. Previously, similarly strong revenue had been overshadowed by concerns about high spending and weak free cash flow, causing the shares to decline after the results.
This time, analysts responded by broadly raising their price targets. JPMorgan more than doubled its estimate from $240 to $500. Cantor Fitzgerald raised its target to $345, Barclays to $300, and Morgan Stanley reaffirmed the same figure. Wells Fargo now expects $274, Citi $240, UBS $230, and TD Cowen $224. The financial institutions cited a strong quarter, accelerating expansion of computing capacity, Starlink’s success, and progress on the Starship project as reasons for their moves.
Sources: cnbc.com and finance.yahoo.com
