SpaceX shares surge after AI and Starlink results top expectations

Investors rushed to buy SpaceX stock on Monday after the company delivered a quarter that far exceeded market predictions.

The rapid shift in sentiment follows a busy few years for the firm. SpaceX has been aggressively expanding its business beyond traditional rocket launches. The company built out the Starlink satellite internet network to serve millions of consumers. It also launched a new division dedicated to artificial intelligence compute infrastructure. This segment, known as Super Intelligence, has grown exponentially. The firm has continued to develop its Starship rocket system while simultaneously integrating AI tools into its operations.

The financial results released after the market close on Tuesday, October 20, show how fast this growth has accelerated. Total revenue reached 14.6 billion dollars, a 161 percent jump compared to the same period last year. This figure was well above the 12.7 billion dollars that analysts had expected. The company reported a net profit of 4.4 billion dollars, a significant improvement from a loss in the prior year. The Super Intelligence division was the primary driver of this success, generating 7.6 billion dollars in revenue. That segment grew by nearly 830 percent year over year. The Connectivity segment added 5.2 billion dollars in revenue, pushing the Starlink consumer base to 13.6 million subscribers.

The earnings call provided further details that excited investors. CEO Elon Musk and CFO Bret Johnsen outlined revenue guidance for the first quarter of 2027 between 33 billion and 37 billion dollars. This projection was much higher than the 22 billion dollars that analysts had modeled. The company also announced plans to spend 35 billion to 40 billion dollars on capital expenditures in the fourth quarter. These funds are earmarked for AI compute infrastructure at locations including Memphis and Southaven. Management aims to reach 2.5 to 3 gigawatts of compute capacity by the end of this year. They discussed pathways to reach 13 gigawatts or more by the end of 2027. Musk noted that demand from large technology customers remains strong, with payback periods for compute pricing potentially as short as six months.

Analysts responded quickly to these figures. JPMorgan more than doubled its price target to 500 dollars from 240 dollars while maintaining an Overweight rating. Cantor Fitzgerald raised its target to 345 dollars, and Barclays moved its target to 300 dollars. Citi increased its target to 240 dollars, while UBS and TD Cowen raised theirs to 230 dollars and 224 dollars respectively. Morgan Stanley held an Overweight rating with a 300 dollar target. Wells Fargo and Clear Street also adjusted their targets higher to 274 dollars and 248 dollars. The firms cited the strong quarterly performance, rapid AI expansion, and Starlink progress as key reasons for the upward revisions.

SpaceX shares closed at 147.79 dollars on Tuesday. The stock jumped roughly 8 percent in early premarket trading on Wednesday as investors processed the new information. The average analyst price target has moved higher, reflecting greater confidence in the company's trajectory across launch, connectivity, and AI. However, the high level of spending on new infrastructure remains a point of focus for some market watchers.

The next phase for SpaceX will involve executing its massive infrastructure buildout. The company must convert its AI compute capacity into sustained revenue growth. Investors will be watching to see if the demand from hyperscalers holds up as the new facilities come online. The potential combination with Tesla, which special committees are exploring, could also shape the company's future direction.