SpaceX profit beats estimates on 161% revenue jump, growth in AI, satellite internet businesses

SpaceX surpassed analysts' projections for both quarterly revenue and profit, thanks to robust expansion in its AI and satellite internet sectors. The aerospace and technology company disclosed US$4.4 billion in net income for the quarter ending in September, significantly outpacing the average analyst estimate of US$1.88 billion. SpaceX's revenue boomed by 161% year-over-year, also beating expectations.

Following the close of regular trading on Tuesday, SpaceX shares surged by up to 4.7%, after initially trading at a record high of US$147.79. The company's valuation now stands at US$2 trillion, placing it alongside other tech giants and leading Elon Musk's electric vehicle firm, Tesla. The magnitude of SpaceX's growth is attributed to Musk's ambitious plans, which include constructing data centers in space and developing a highly reusable Starship rocket, both of which are expected to be expensive, risky, and require substantial time to implement.

Despite these long-term initiatives, Wall Street remains highly optimistic about SpaceX, largely due to Musk's history of disrupting established industries. The company's accomplishments, such as supplying compute and infrastructure services to major AI firms and acquiring an AI coding tool developer, have bolstered its position in the market. In the third quarter, SpaceX's AI business, now referred to as Super Intelligence or SI, generated US$7.56 billion in revenue, a staggering nine-fold increase from the previous year.

The growth in SpaceX's AI business can be attributed to increased adoption of Grok, large language models developed by Musk's xAI, and significant contributions from AI-powered coding tools. SpaceX's satellite internet service, Starlink, which remains its largest revenue generator, saw 13.6 million subscribers by the end of the third quarter, slightly below the 14.2 million analysts anticipated.

Nonetheless, the company's connectivity business still managed to increase revenue by 69% year-over-year, reaching US$5.25 billion.