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SpaceX Surges on Solid Q3 Beat & Upbeat Outlook: ETFs to Tap
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Key Takeaways
SpaceX's Q3 revenue jumped 161%, beating estimates on AI growth.
AI and Starlink are driving SpaceX's growth and profitability.
SpaceX's upbeat 2027 outlook puts SpaceX-focused ETFs in focus.
SpaceX (SPCX - Free Report) shares climbed about 9% in extended trading on Tuesday 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 TeslaTSLA, 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, generating $431 million in operating income during the quarter. SpaceX has been expanding its AI computing operations by providing infrastructure and cloud capacity to customers, including Google (GOOGL - Free Report) and Anthropic.
SpaceX CFO Bret Johnsen said that the AI compute business for clients like AI labs and other companies was robust, as quoted on Yahoo Finance. SpaceX said it added $6.7 billion in incremental year-over-year revenue from its Super Intelligence business and related infrastructure.
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. Starlink's subscriber base expanded to 13.6 million from 12 million in the previous quarter. Operating income from the connectivity business nearly doubled to $2.37 billion.
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).
By comparison, the launch business recorded a more modest increase, with revenue rising to $1.77 billion from $1.67 billion a year earlier. The space division reported a $7 million operating loss.
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.
Johnsen attributed the forecast to improved visibility into the company's computing contract pipeline over the next six months.
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.
Musk Says SpaceX-Tesla Merger Could Make Sense
Musk addressed speculation about a possible merger between SpaceX and Tesla during the earnings call. He added that he would not participate in merger-related discussions because of his potential conflict of interest.
ETFs in Focus
Against this backdrop, below we highlight a few exchange-traded funds (ETFs) with significant exposure to SpaceX that investors may consider.
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SpaceX Surges on Solid Q3 Beat & Upbeat Outlook: ETFs to Tap
Key Takeaways
SpaceX (SPCX - Free Report) shares climbed about 9% in extended trading on Tuesday 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, generating $431 million in operating income during the quarter. SpaceX has been expanding its AI computing operations by providing infrastructure and cloud capacity to customers, including Google (GOOGL - Free Report) and Anthropic.
SpaceX CFO Bret Johnsen said that the AI compute business for clients like AI labs and other companies was robust, as quoted on Yahoo Finance. SpaceX said it added $6.7 billion in incremental year-over-year revenue from its Super Intelligence business and related infrastructure.
Revenue gains are driven by cloud contracts, the Cursor acquisition and the integration of xAI and demand for its Grok AI models and software applications (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. Starlink's subscriber base expanded to 13.6 million from 12 million in the previous quarter. Operating income from the connectivity business nearly doubled to $2.37 billion.
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).
By comparison, the launch business recorded a more modest increase, with revenue rising to $1.77 billion from $1.67 billion a year earlier. The space division reported a $7 million operating loss.
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.
Johnsen attributed the forecast to improved visibility into the company's computing contract pipeline over the next six months.
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.
Musk Says SpaceX-Tesla Merger Could Make Sense
Musk addressed speculation about a possible merger between SpaceX and Tesla during the earnings call. He added that he would not participate in merger-related discussions because of his potential conflict of interest.
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 - Free Report) , Roundhill Space & Technology ETF (MARS - Free Report) , VanEck Space ETF (WARP - Free Report) , VanEck Space ETF (ORBX - Free Report) , VegaShares SpaceX & Beyond Earth ETF (XSPC - Free Report) and WisdomTree Space Economy Fund (WSPC - Free Report) are the ETFs that invest in SpaceX to a significant extent.
Major leveraged SpaceX ETFsinclude the Direxion Daily SpaceX Bull & Bear 2X ETF (LOFF - Free Report) , ProShares Ultra SpaceX (SPCF - Free Report) , and T-REX 2X Long SpaceX Daily Target ETF (SPAX - Free Report) .