Shares of SpaceX jumped 10% in pre-market trade after the firm announced a 161% uptick in its revenue for the third quarter, as well as founder Elon Musk confirming that he is considering merging the company with Tesla.
The firm's revenue beat analysts' estimates at $14.6 billion. The company also swung to a profit in the third quarter, with $4.4 billion compared to a net loss of $1.05 billion in the year-ago period.
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Musk had made the confirmation on the company's earnings call, adding that both Tesla and SpaceX's company boards formed specific committees to discuss the merger, which would be the one of the largest in corporate history.
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,” Musk stated on the call.
Tesla is set to announce its earnings for the third quarter on Wednesday after the market closes.
Shares of Tesla were up 7.63% to $158.91 in pre-market trade on the Nasdaq. Tesla's stock futures saw a 1.49% rise to $379.29.
SpaceX and Tesla shares extended their gains after the comments, rising as much as 8.6% and 1.7%, respectively, in late trading. SpaceX remained the larger company of the two, ending the session with a market capitalisation of $2 trillion.
Revenue from SpaceX's artificial intelligence business, now branded as Super Intelligence (SI), surged to $7.56 billion during the quarter, more than nine times higher than a year earlier. The company has emerged as a major provider of computing infrastructure to firms such as Anthropic and Alphabet, and further strengthened its AI portfolio with the acquisition of AI coding tool developer Cursor in August.
Driven by growing adoption of xAI's Grok large language models and strong demand for AI computing capacity, the SI business reported operating income of $431 million in the third quarter. This marks a sharp turnaround from the $1.7 billion operating loss recorded in the same period last year.
"Super Intelligence was the standout growth driver for the quarter," Chief Financial Officer Bret Johnsen said on the earnings call, citing rising demand from customers seeking greater computing power as well as growing enterprise adoption of Grok.
SpaceX expects total revenue to reach as much as $37 billion in the first quarter of next year. Johnsen also indicated that the company plans to continue raising debt and is currently in discussions with multiple sources of debt capital.
Starlink, SpaceX's satellite internet business and its largest revenue contributor, grew its subscriber base to 13.6 million by the end of the third quarter, although the figure fell short of analysts' expectations. Despite that, revenue from the connectivity segment jumped 69% year-on-year to $5.25 billion, exceeding market estimates.
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