Elon Musk’s Ventures Boost Market Shares Following Impressive Earnings
On Wednesday, shares of both SpaceX and Tesla experienced a significant surge after SpaceX disclosed remarkable revenue figures and hinted at a potential merger with Tesla. This development had a ripple effect, pushing other tech stocks and the Nasdaq upwards.
Specifically, SpaceX’s stocks rose by 10% on Wednesday morning after announcing its third-quarter revenue of $14.6 billion, marking an astounding 161% increase compared to the previous year.
An impressive portion of that revenue—around $7.6 billion—originated from its AI division, now referred to as SI, reflecting a nod to President Trump’s favorite term “super intelligence.” This change signifies a notable pivot for the company, which used to rely more heavily on income from its Starlink satellite operations.
In a recent earnings call, Musk, recognized as the world’s richest individual, mentioned that he is considering a historic merger between SpaceX and Tesla, noting that both companies have formed committees to explore this possibility. He remarked, “I do think there’s a lot of merit to combining the companies as we are pretty much in the superintelligence singularity, and there’s a lot to be gained from cooperating.”
Meanwhile, Tesla’s shares, which are scheduled to announce their third-quarter earnings later on Wednesday, saw a 3.3% increase earlier in the day.
Analyst Dan Ives from Yorkville Ives & Co estimated an 80% to 90% probability that a merger between Tesla and SpaceX could occur by the end of 2027, citing various strategic AI and data-driven incentives.
The Nasdaq composite index rose by 0.4% on the same day, with companies in the space sector like RocketLab, Intuitive Machines, and AST SpaceMobile increasing by 4.1%, 6.4%, and 1.1%, respectively.
SpaceX’s optimistic earnings report came just four months after its record-breaking IPO in June, which valued the company at around $1.75 trillion and generated over $85 billion in net proceeds.
Currently, the company is valued at more than $2 trillion.
A merger between SpaceX and Tesla could potentially be the largest in history, especially considering Tesla’s market cap of about $1.5 trillion, although it faces challenges in electric vehicle sales in various markets.
Last week, Tesla sparked excitement among investors by unveiling a futuristic concept of a “flying” car. The Tesla Roadster was showcased in stunning video footage, appearing to glide up a vertically curved track before taking off into the air, performing a mid-air flip, and safely landing using jet propulsion.
Musk has a history of merging his various enterprises. Earlier this year, SpaceX took over his xAI initiative, becoming SpaceXAI, which incorporated the Grok chatbot, social media platform X, and a cloud-leasing service.
Much of SpaceX’s revenue now stems from its ability to lease AI computing power.
Additionally, last year, SpaceX invested about $100 million in purchasing Tesla Cybertrucks, showcasing Musk’s interest in leveraging the close ties between his companies.
“We delivered another strong quarter in Q3. Revenue grew an impressive 161% year-over-year, fueled by continued momentum in Connectivity and a clear inflection in our Super Intelligence business,” stated SpaceX’s Chief Financial Officer Bret Johnson during the earnings call.
The company reported an operating income of $2.8 billion and a net income of $4.4 billion, a notable improvement compared to a net loss of $1.05 billion during the same period the previous year.
Looking ahead, SpaceX forecasts first-quarter revenue for 2027 to reach between $33 billion and $37 billion, surpassing analysts’ expectations of $22.2 billion.
