The first SpaceX earnings report since the company's June listing on Nasdaq produced a result few investors had modeled: its AI unit now brings in more revenue than Starlink. SpaceX reported on Tuesday, October 20, and its shares rallied the next day before falling about 9% on Thursday, when the Nasdaq Composite had its worst session since June. The swing puts a sharp question to both of Elon Musk's public companies: who pays for the AI build-out, and how long will the market accept the bill?
What SpaceX reported on October 20
Fortune reported that SpaceX said third-quarter revenue rose 161% year over year to $14.6 billion, above the $12.86 billion analysts expected. Net income came in at $4.4 billion, and operating income reached $2.79 billion, compared with $2.33 billion expected. Fortune described the result as the company's first operating profit as a public company.
The year-earlier comparison is worth keeping in mind. In the second quarter, SpaceX posted a net loss of $541 million on $7.8 billion of revenue, according to Yahoo Finance. Stocktwits described the third quarter as the company's first profit since its IPO.
AI revenue passed Starlink, and the mix matters
The AI segment, which SpaceX has renamed Super Intelligence, brought in $7.56 billion. Analysts had expected $6.47 billion, and the figure was roughly triple the prior quarter, according to NBC News and Fortune. That put AI ahead of the connectivity business for the first time. Stocktwits put Starlink connectivity sales at $5.25 billion and launch revenue at $1.77 billion.
| Segment | Q3 2026 revenue | Context |
|---|---|---|
| AI (Super Intelligence) | $7.56 billion | Expected $6.47 billion; roughly triple the prior quarter |
| Starlink connectivity | $5.25 billion | Surpassed by the AI segment for the first time |
| Launch | $1.77 billion | Smallest of the three reported lines |
Those three lines add up to about $14.58 billion, which matches the reported total. The table shows how much the AI line now outweighs the satellite internet business that built the company's public profile.
The comparison needs a caveat. Stocktwits attributed part of the jump to the acquisition of Cursor, which closed in August at an implied equity value of about $60 billion. Acquired revenue flatters a segment's growth rate, so investors will want to know how much of the $7.56 billion came from Cursor and how much came from existing AI operations. Until the filing breaks that out, the underlying growth rate is harder to read than the headline suggests.
Who is paying for the AI compute
Most of the AI money comes from renting data center capacity rather than selling SpaceX's own models. NBC News reported that the company rents capacity to developers including Anthropic, Google and Reflection AI. A separate description of the segment also lists Grok and X among the users of leased computing capacity.
That mix creates concentration risk. A few large tenants can move a segment's results sharply, and a renewal decision or a pullback in AI demand would show up quickly in the numbers. Anthropic's own revenue and valuation story is part of the same picture, which USA 24 covered in its report on Anthropic's Q3 revenue.
Renting compute is a different business from selling consumer Starlink service. It depends on enterprise contracts, data center utilization and the pricing of capacity, and it can change quickly when a tenant's needs shift. Investors who value SpaceX as a satellite internet company are now also valuing a cloud landlord, and the two businesses carry different risks.
Capital spending outran the quarter's revenue
The spending side of the ledger is the counterweight. SpaceX spent about $19.6 billion on capital expenditure in the quarter, with roughly $16.4 billion going to AI infrastructure. That capex total exceeds the entire $14.6 billion of quarterly revenue, and it left free cash flow negative.
A profit line and a cash-burn line can coexist for a company in build-out mode. Net income of $4.4 billion and operating income of $2.79 billion sit alongside negative free cash flow, which is why the filing matters more than the headline figures. Readers should check how much of the profit came from recurring revenue and how much came from one-time items.
The reports also disagree on per-share earnings. Fortune and Stocktwits cite 35 cents on a GAAP basis, while NBC News cites 45 cents, an IBES-calculated figure. Stocktwits also reported an adjusted core profit of $8.81 billion, which is not a GAAP measure. When comparing the company with peers, use the GAAP line in the filing.
Why the stock gave back its post-earnings gains
The stock reaction swung sharply. Stocktwits reported that SpaceX shares rose about 2% after hours on Tuesday. Investing.com reported a 7.79% gain on Wednesday, to $159.31. On Thursday, the stock fell 9.14%, and Yahoo Finance reported that it gave back more than half of Wednesday's post-earnings gain.
The broader market made it worse. The Nasdaq Composite fell 2.6%, with technology stocks taking the heaviest losses, and Meta shares also plunged that day. Investors who had treated AI spending as an uncontested growth story started asking about returns, and SpaceX sat squarely in that debate. USA 24 covered Meta's stock drop in the same session.
Not every analyst turned cautious. PhillipCapital double upgraded SpaceX to buy from sell and raised its price target to $250 from $75, citing surprising gains in the AI business, according to CNBC. Premarket trading on Friday showed SpaceX, Tesla and Meta stabilizing after the previous session's declines, per Yahoo Finance. A premarket bounce does not settle the question, and the full session will matter more.
What Tesla's same-week report adds
Tesla reported the same week, and its numbers raise the same question. Adjusted earnings of 48 cents beat the 45 cents expected. Tesla cut its 2026 capex budget to about $20 billion, yet it still plans to spend more than twice what it spent in 2025, according to Tikr's coverage of the report. Its shares fell about 3% on Thursday.
Tesla also said it has secured capacity to borrow up to $30 billion to support expected capex growth. The company said it does not plan to make any draws under the new facilities this calendar year. That reads as a financing backstop rather than an immediate need, though the size of the commitment signals how much spending management expects.
The merger talk ties the two companies together. Musk has discussed a Tesla-SpaceX combination, and USA 24 has reported that the two companies formed special committees to explore one, as detailed in this report on the merger committees. If talks advance, investors would need to weigh SpaceX's AI spending, its newly visible cash burn and its valuation against Tesla's own capex plans. The reporting available so far does not show where those talks stand.
How to check SpaceX numbers before you act
Readers acting on this news should start with their own exposure, not the headline.
- Check whether your brokerage account, 401(k) or index fund holds SpaceX, Tesla, Meta or other AI-infrastructure names. Index funds can hold these stocks indirectly, so review the top holdings list.
- Read the Form 10-Q, not just the press release. Look for segment revenue, customer concentration, capex by category and the Cursor contribution.
- Confirm the EPS figure. Compare the 35-cent GAAP number with the 45-cent IBES figure before quoting either one.
- Treat adjusted profit as management's framing. The $8.81 billion adjusted core profit is useful context but is not a GAAP measure.
- Retirement savers do not need to act on this news alone. The Nasdaq decline and the reversal of gains affect holdings directly, but rebalancing decisions should follow your plan and time horizon.
What to watch next
Three things matter most in the coming weeks. The first is whether the 10-Q separates Cursor revenue from the rest of the AI business. The second is whether the list of compute tenants broadens beyond a few large buyers. The third is whether either Musk company offers more detail on merger talks or capex timing. Friday's trading will show whether the post-earnings selling holds, or whether the AI trade finds a floor for now.
