SpaceX SPCX 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 Estimates
SpaceX 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 Driver
SpaceX'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 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 Driver
Despite 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 2027
SpaceX 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, Roundhill Space & Technology ETF MARS, VanEck Space ETF WARP, VanEck Space ETF ORBX, VegaShares SpaceX & Beyond Earth ETF XSPC and WisdomTree Space Economy Fund WSPC are the ETFs thatinvest in SpaceX to a significant extent.
Major leveraged SpaceX ETFs include the Direxion Daily SpaceX Bull & Bear 2X ETF LOFF, ProShares Ultra SpaceX SPCF, and T-REX 2X Long SpaceX Daily Target ETF SPAX.
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This article originally published on Zacks Investment Research (zacks.com).