SpaceX shares climbed 7% to $159.13 on Wednesday after the aerospace and artificial intelligence company delivered third-quarter results that beat expectations and issued a bullish revenue forecast, buoying sentiment across chipmakers and data-center infrastructure providers.
Revenue for the quarter jumped 161% year over year to $14.58 billion, surpassing the $12.9 billion consensus estimate compiled by LSEG. Net income came in at $4.4 billion, roughly $3 billion above analyst projections and a sharp swing from a net loss in the prior-year period.
The company guided first-quarter 2027 revenue to a range of $33 billion to $37 billion, well ahead of the $22 billion analysts tracked by FactSet had expected. The upbeat outlook underscores accelerating demand for AI computing capacity, which has become a key growth driver for SpaceX.
AI unit outshines Starlink
SpaceX's Super Intelligence division, which houses its AI computing business, generated $7.6 billion in revenue, up approximately 830% year over year. For the first time, the unit accounted for more than half of quarterly sales, overtaking the Starlink connectivity business.
The company rents computing capacity to AI developers, providing access to its data-center infrastructure. The results offered investors evidence that demand for computing power is translating into substantial revenue.
Chief executive Elon Musk said the company is facing a potential shortage of AI computing capacity. "I think we're going to face a shortage of Super Intelligence compute. And that shortage is going to remain for a long time," Musk said. He added that SpaceX could rent out its computing resources several times over if it accepted every customer request.
AI stocks rally on SpaceX's expansion plans
SpaceX's results lifted shares across the AI supply chain. Micron Technology gained around 2.5%, while Nvidia rose approximately 2.2%. Intel also advanced, and power and infrastructure suppliers GE Vernova, Bloom Energy, Vertiv, and Eaton posted gains.
Melius Research analyst Ben Reitzes described the earnings call as positive for chip stocks, writing, "Good night for AI bulls, hope it lasts." William Blair analyst Louie DiPalma said the AI boom was well suited to SpaceX's business model. RBC Capital Markets analysts, led by Ken Herbert, identified the Super Intelligence division as the standout performer in the quarter.
SpaceX ended the third quarter with 1.7 gigawatts of AI computing capacity. Musk outlined plans to increase that to 3 gigawatts by year-end and potentially reach between 13 gigawatts and 20 gigawatts by the end of 2027. The company also expects infrastructure spending to rise sharply, with plans to spend between $35 billion and $40 billion in the December quarter, compared with $19.6 billion in the third quarter.
SpaceX said it was on track to reach an annual recurring revenue run rate of $100 billion by December. Musk suggested that figure could reach between $500 billion and $1 trillion by the end of 2027, supported by adoption of Grok Bot.
Analysts raise targets but flag risks
Several analysts raised their price targets following the results. Cantor Fitzgerald increased its target to $345 from $246 and named SpaceX its top coverage pick, while Citi raised its target to $240 from $200. JPMorgan lifted its target to $500 from $240, an increase of approximately 108%. The average analyst price target rose to $244, according to FactSet.
However, Morgan Stanley analysts, led by Adam Jonas, said they were taking a conservative approach to their 2027 projections because of uncertainty around power availability, execution, and financing. Their model assumes AI computing capacity of 8.3 gigawatts by the end of 2027. KeyBanc analyst Michael Leshock also highlighted SpaceX's substantial AI spending and the need for external financing in the coming years.
The results strengthened the case for AI infrastructure demand, but investors will continue to monitor whether SpaceX can deliver its ambitious capacity expansion while funding its investment plans.
This article is for informational purposes only and does not constitute financial advice.
