SpaceX Shares Surge 8% After Strong Q3 Earnings and Musk Proposes Tesla Merger

Shares of SpaceX increased by 8 percent on Wednesday after the company revealed impressive third-quarter financial results and Elon Musk suggested a possible merger with Tesla. SpaceX, which made its Nasdaq debut in June with the largest initial public offering to date, reported revenue of $14.6 billion for the third quarter of 2026. This figure represents a 161 percent increase compared to the same quarter the previous year and exceeded the consensus estimate of $12.72 billion from LSEG analysts.

Notably, SpaceX’s operating income stood at $2.8 billion, while net income reached $4.4 billion in the quarter, a significant turnaround from a $1.05 billion net loss reported in Q3 2025. During the earnings call, Musk raised the prospect of merging SpaceX with Tesla, which would create the largest corporate merger in history. He explained that both companies’ boards have set up dedicated committees to explore the feasibility of this consolidation.

"I believe there is considerable value in combining the two companies, especially as we are approaching a superintelligence singularity," Musk said. He highlighted that collaboration between SpaceX and Tesla could yield substantial benefits. Tesla is scheduled to release its third-quarter financial results after the market closes on Wednesday.

The positive momentum in the space sector was evident as shares of other companies such as Rocket Lab, Intuitive Machines, and AST SpaceMobile also saw gains on Wednesday. SpaceX’s growth projections remain strong, with the company forecasting revenue for the first quarter of 2027 to be between $33 billion and $37 billion, well above the average analyst estimate of $22.2 billion according to LSEG.

Bret Johnson, SpaceX’s Chief Financial Officer, attributed the robust quarterly performance to recurring revenue streams from the Starlink satellite internet service and rapid growth in the company’s Super Intelligence division. He noted that the segment, which SpaceX now refers to as Super Intelligence rather than artificial intelligence, experienced a ninefold increase in revenue, rising from $813 million last year to $7.56 billion this quarter.

This year, SpaceX has significantly invested in AI technologies, positioning its Super Intelligence business as the largest contributor to its overall revenue. The company’s expansion in this area aligns with broader industry trends, where demand for AI cloud services continues to surge.

Analysts at Truist Securities commented on the earnings call, highlighting the strong pricing power and shorter payback periods for AI cloud providers demonstrated by SpaceX’s results. They pointed out that despite recent market concerns about financing challenges for AI cloud companies, SpaceX’s performance provides a positive data point supporting the optimistic outlook for this sector.

The analysts also observed that SpaceX noted it could rent its computing capacity multiple times over, indicating extremely high demand. They suggested that companies like Coreweave and Nebius are well poised to benefit from this demand surge, forecasting that their pricing power will counterbalance any impact from rising interest rates.

On Wednesday, Nebius and Coreweave shares saw slight declines, while companies such as Iren and Applied Digital recorded gains in early trading. These movements reflect the broader market attention on cloud computing providers specializing in AI infrastructure.

SpaceX’s strong Q3 results and Musk’s announcement about exploring a merger with Tesla signal significant developments for both companies, as they continue to invest in cutting-edge technologies including AI and satellite internet. The potential merger could reshape the technology and space industries and warrants close attention as discussions progress.

Contributors to this report include Lora Kolodny. For more updates on technology and market news, stay tuned to trusted financial news sources.