SpaceX Q3 Revenue Surges 161% as AI Overtakes Starlink; Musk Backs Tesla Merger

Key points

• Q3 revenue reached $14.58 billion, up 161% year-over-year.
• The AI division generated $7.6 billion, surpassing Starlink's $5.2 billion.
• Net profit was $4.4 billion, reversing a $541 million loss in Q2.
• Capital expenditures hit $19.6 billion, with $16.4 billion allocated to AI infrastructure.
• Starlink subscribers grew to 13.6 million, up from 12 million in Q2.
• Musk confirmed independent committees are evaluating a Tesla-SpaceX merger.

Background

SpaceX completed its initial public offering in June 2026, raising $85.7 billion and valuing the company at $1.75 trillion. The company merged with xAI in February 2026, accelerating its pivot toward AI infrastructure. Prior to Q3, Starlink accounted for 61% of revenue, but the AI division has since become the primary growth engine.

How outlets are covering it

The New York Post emphasized the dramatic shift in revenue drivers, highlighting that AI now outperforms Starlink. CNBC focused on analyst expectations, noting that AI revenue exceeded forecasts of $6.47 billion, and highlighted speculation around a Tesla merger. Yahoo Finance reported that capital expenditures were lower than expected, which contributed to the positive market reaction. Analysts from RBC Capital Markets and Cantor Fitzgerald expressed bullish views, while Oppenheimer cautioned that subscriber growth is slowing.

Why it matters

SpaceX's pivot to AI infrastructure has transformed its revenue model, making it a major competitor in the AI market. The potential merger with Tesla could create a $3.5 trillion entity, reshaping the tech and automotive industries. The company's massive capital expenditures signal a long-term commitment to AI, despite concerns about profitability and infrastructure costs.

What to watch

SpaceX plans to attempt catching both the Starship booster and spacecraft in November. The company expects to launch Starship weekly in the first half of 2027. Shareholder approval is required for any Tesla merger, and Musk has pledged to donate SpaceX shares to every child in the U.S. next year.