SpaceX posts first quarterly profit, lifting tech stocks and AI sentiment

SpaceX posted its first quarterly profit as a publicly traded company, a result that lifted technology stocks and reinforced bullish sentiment around artificial intelligence investments.

The aerospace and AI infrastructure company reported net income of $4.4 billion for the July-September period, compared with a loss of $1.1 billion a year earlier. Revenue surged 161% year over year to $14.6 billion, according to the company’s third-quarter earnings release. Earnings per share of $0.35 easily beat the consensus estimate of $0.10.

SpaceX shares rose nearly 8% to close at $159.31, after touching a peak gain of more than 12% during the session. The stock is listed on the Nasdaq under ticker SPCX after a record initial public offering in June that generated approximately $85.7 billion in net proceeds.

“SpaceX delivered some impressive earnings results and guidance, to go along with a pronouncement that it could rent out its AI compute capacity many times over if it was able,” said Patrick O’Hare, market analyst at Briefing.com.

The earnings report came with just four days’ notice, catching many investors off guard. The strong results rippled through broader markets. The Nasdaq Composite gained 1.05%, the S&P 500 rose 0.58%, and the Dow Jones Industrial Average added 0.69%. Global markets also rose, with Japan, South Korea, the UK, and France’s CAC 40 all closing higher.

“SpaceX basically lifted the AI spirits,” said Peter Cardillo of Spartan Capital Securities. “If the earnings season continues on this path, I think we’re in for a solid rally towards year-end.”

The upbeat mood followed weeks of concern that the AI trade might be losing momentum. “A lot of the concerns that we had over the last few weeks that sent the market lower are being alleviated,” said Adam Sarhan, chief executive of 50 Park Investments in New York. Earnings “are coming in mixed to stronger than expected,” which he called a relief.

Super Micro Computer also boosted AI sentiment after the server maker forecast quarterly revenue and profit margin above Wall Street estimates. Its shares rose 9.5%.

SpaceX’s results highlighted the rapid commercialization of its AI compute capacity. The company’s Super Intelligence segment generated over $7.5 billion in revenue in the quarter, according to MarketBeat, a substantial jump from roughly $2.56 billion in the second quarter. The unit’s compute capacity reached approximately 1.7 gigawatts by the end of September. The connectivity segment, driven by Starlink, delivered about $5.25 billion in revenue at an estimated 55% gross margin, with the consumer broadband base expanding to about 13.6 million subscribers.

SpaceX reported capital expenditures of roughly $19.59 billion in the third quarter, up from about $18.37 billion in the prior quarter. Management guided for $35 billion to $40 billion in fourth-quarter capital spending as the company deploys V3 satellites, scales Starship development, and expands its compute footprint. The company ended September with $51.3 billion in cash and cash equivalents and $38.6 billion in marketable securities, providing ample liquidity for the accelerated spending.

Total backlog stood at approximately $63 billion, with roughly $42 billion expected to be recognized over the next 12 months, according to MarketBeat.

Other notable market moves included a 5.3% drop in Netflix after its latest results added to worries about the streaming company’s prospects. Meta Platforms shares gained after the bell after the Facebook owner raised the lower end of its annual spending forecast. Tesla shares also rose in after-hours trading on a surprise positive cash flow for the third quarter.

In Europe, France’s 10-year bond yield closed above 5% for the first time since 2002, as investors demanded higher returns amid a budget standoff and violent protests. French supermarket operator Carrefour plunged more than 13% after cutting its guidance, with Chief Executive Alexandre Bompard saying around 50 stores were looted over the weekend and that operating profit could be cut by 80 million to 200 million euros. EssilorLuxottica soared more than 16% after reporting a 24% jump in sales of lenses that help slow short-sightedness in children.

US Treasury yields edged lower, with the benchmark 10-year note shedding 0.6 basis point to 5.111%. The US dollar index fell 0.14%. Oil markets were mixed, with Brent crude settling little changed at $108.82 a barrel and West Texas Intermediate falling 0.7% to $97.15.

“The trick will be in convincing skittish investors that splashing the cash will deliver the long-term growth it needs,” said Chris Beauchamp, chief market analyst at IG, referring to Meta’s AI spending.