SpaceX shares are drawing heavy attention because the company reported its first quarterly profit since its June 2026 initial public offering, or IPO, the moment a private company first sells shares to the public. The results were released after the market closed on Tuesday, October 20, 2026, and the stock rose in extended trading, with CNBC reporting a gain of about 5 percent. The same earnings call included talk of a possible merger with Tesla, and a large block of shares is about to become freely tradable. Together these three events explain the sudden surge of interest in the ticker SPCX.
For the quarter ended September 2026, SpaceX reported revenue of 14.58 billion dollars against roughly 12.72 billion dollars expected by analysts, according to CNBC. Net income reached 4.4 billion dollars, compared with a net loss of about 1.05 billion dollars a year earlier. Adjusted earnings per share, a measure that strips out certain items, came in at 45 cents versus 13 cents expected, per CNBC, while Yahoo Finance cited 35 cents against 15 cents. Revenue grew 161 percent year over year.
The swing from a loss to a profit is the headline number most outlets led with, because it marks the first profitable quarter since SpaceX listed its shares in June 2026. A year earlier the company lost about 1.05 billion dollars in the same three-month period, so the change is roughly 5.5 billion dollars. Adjusted core profit, reported as adjusted EBITDA, reached 8.81 billion dollars against 6.59 billion dollars expected, according to Yahoo Finance. Adjusted EBITDA is a rough proxy for cash earnings before interest, taxes, depreciation and amortisation are subtracted.
The most surprising part of the report is that artificial intelligence revenue overtook the satellite internet business for the first time. The AI segment, which SpaceX labels "Super Intelligence," brought in 7.56 billion dollars, up roughly ninefold from 813 million dollars a year earlier, and swung to a 431 million dollar profit, according to CNBC. Growth was helped by the August closing of the Cursor acquisition and by cloud deals with Anthropic, Google and Reflection AI. This shift matters because it changes what kind of company investors think they own.
SpaceX closed its 60 billion dollar acquisition of Cursor during the quarter, according to CNBC, which is a large part of why AI revenue jumped so sharply. Buying a company outright adds its sales to the buyer's top line, so some of the ninefold increase reflects a purchase rather than growth in existing products. The AI segment also turned profitable at 431 million dollars, which is notable because young AI businesses often lose money while they scale. Investors should separate revenue added by acquisition from revenue grown organically when judging how durable this trend is.
Starlink, the satellite internet service, remains the steadier part of the business. Connectivity revenue rose 69 percent to 5.25 billion dollars, and operating income roughly doubled to 2.37 billion dollars, per CNBC. Subscribers reached 13.6 million with average revenue per user of 69 dollars, and the transcript notes more than 11,000 satellites in orbit. This segment produces real cash today, while the AI segment is younger and far more capital hungry.
The rocket launch business, the activity SpaceX was originally built around, contributed 1.77 billion dollars in revenue, up only slightly from 1.67 billion dollars a year earlier, according to CNBC. That makes launch the smallest of the three reported segments and the slowest growing. It still matters strategically, because launching satellites is how Starlink gets to orbit. For an investor reading the numbers, though, launch is no longer the story driving the share price.
SpaceX spent 19.59 billion dollars on capital expenditure during the quarter, of which 16.44 billion dollars went to AI, according to Yahoo Finance. Capital expenditure, often shortened to capex, is money spent on long-lived assets such as data centres, chips and equipment. Because capex exceeded the profit the company generated, free cash flow was negative, meaning the business consumed more cash than it produced. A profitable quarter and positive cash flow are therefore not the same thing here.
Chief Financial Officer Bret Johnsen guided first-quarter 2027 revenue to between 33 billion and 37 billion dollars, according to CNBC, well above the roughly 22.2 billion dollars analysts had been expecting. Guidance is a company's own forecast, not a guarantee, and it can be revised if conditions change. Even so, a target that far above consensus signals management expects the AI and connectivity businesses to keep expanding quickly. This forward-looking number is one reason the stock reacted so strongly.
On the same call, Elon Musk called a merger between SpaceX and Tesla a "good idea," and special committees have been formed at both boards to study it, according to CNBC. Musk also acknowledged the conflict of interest created by his role at both companies and said any deal would need majority backing from all Tesla shares, which he described as a high hurdle. He added that treating a merger as certain would overstate the situation. Nothing has been agreed, and the study itself is not a transaction.
A combination of two listed companies of this size would normally require board approval, shareholder votes, regulatory review and a disclosed exchange ratio between the two stocks. Musk's own comment that approval requires a majority of all Tesla shares, not just those voted, raises the bar considerably. Because he leads both firms, independent directors would be expected to negotiate on behalf of each side. Until a formal proposal is filed, the merger talk is a possibility under review rather than a plan.
SPCX closed Tuesday around 148 dollars, compared with its 135 dollar IPO price and a high near 226 dollars, according to Yahoo Finance. It then rose in after-hours trading once the results landed, with CNBC reporting about 5 percent and other outlets citing gains of 2.2 percent. After-hours trading happens outside regular market hours and can be thin, so those moves are not always repeated at the next open. The gap between the current price and the earlier high shows how much expectations have already shifted.
On Thursday, October 22, up to 1.3 billion shares become eligible for sale, roughly 28 percent of the approximately 4.7 billion share pool, with another 328 million shares following on October 24, according to Yahoo Finance. This is the largest release under the 180-day lockup, a standard period after an IPO during which early investors and employees cannot sell. When a lockup expires, supply of tradable shares increases, and the market watches closely to see whether holders sell. That is a major reason the stock is in the news this week beyond the earnings themselves.
A lockup exists to prevent insiders from dumping shares immediately after an IPO, which could crush the price before the market settles. When it expires, the number of shares available to trade rises, and if many holders choose to sell, the added supply can push the price down even when the underlying business is doing well. The reverse is also possible: a calm reaction can signal that holders intend to stay. The size of this release, about 28 percent of the share pool in one step, is what makes it notable.
Starship, the heavy-lift rocket intended for future missions, has still not entered commercial service, and its most recent first orbital test flight ended early because of an engine issue. That means a programme investors often cite as central to the company's long-term value is not yet generating revenue from paying customers. Development setbacks in rocketry are common and do not by themselves predict the outcome of the next attempt. They do, however, mean timelines should be treated as uncertain.
The AI revenue surge comes from a young business that consumes large amounts of capital, which is exactly why capex reached 19.59 billion dollars in one quarter. Fast growth from a small base can look dramatic in percentage terms while remaining unproven over a full economic cycle. The segment's 431 million dollar profit is encouraging but modest next to the money being invested in it. Anyone weighing the stock should treat the AI story as promising but early, not as an established earnings engine.
Judged on the same criteria of revenue size, growth and profitability, AI is now the largest at 7.56 billion dollars and the fastest growing, but it is the newest and most capital intensive. Starlink is the most profitable relative to its size, with 2.37 billion dollars of operating income on 5.25 billion dollars of revenue. Launch is the smallest and slowest at 1.77 billion dollars, yet it underpins the satellite business. AI suits investors focused on growth, Starlink on cash generation, and launch on strategic value.
SpaceX beat expectations on revenue, earnings per share and adjusted EBITDA, but a beat only means the result was better than the average analyst forecast, not that the business is guaranteed to keep improving. Forecasts are estimates compiled before the quarter closes, and companies can beat a low bar as easily as they can clear a high one. The guidance for 33 to 37 billion dollars in the next quarter is management's own projection and carries the same uncertainty. Past results do not determine future prices.
Three things will show whether this quarter was a turning point or a one-off: whether AI revenue keeps growing without further large acquisitions, whether free cash flow turns positive as capex matures, and how the share price absorbs the October lockup releases. Progress on Starship's commercial service would also change the long-term picture. Any formal Tesla merger proposal would need filings and votes before it becomes more than discussion. Each of these is observable, which makes them more useful than reacting to daily price moves.
SpaceX stock is trending because a first profitable quarter, a ninefold jump in AI revenue, a raised outlook far above consensus and a Tesla merger floated by Musk all landed within days of a very large lockup expiry. The company earned 4.4 billion dollars on 14.58 billion dollars of revenue in the September 2026 quarter, per CNBC, while spending 19.59 billion dollars on capital projects. The opportunity is real growth in AI and connectivity; the risks are heavy cash use, an unproven AI business and the added share supply now reaching the market. Weighing both sides is the reasonable way to read the news.
