SpaceX earnings shock Wall Street with massive revenue jump

A sharp disconnect emerged between Wall Street expectations and reality late last week. SpaceX reported third-quarter results that far exceeded analyst forecasts, triggering an immediate and aggressive reassessment of the company's value by major investment firms. The stock reacted violently to the news, signaling a shift in investor sentiment toward the company's aggressive expansion plans.

The financial numbers explain the sudden enthusiasm. SpaceX generated $14.6 billion in revenue for the quarter. This represents a 161 percent year-over-year increase. Consensus estimates had placed revenue near $12.7 billion, meaning the company significantly outperformed the market's baseline. The bottom line saw a dramatic turnaround as well. The company posted a net profit of $4.4 billion, reversing a loss from the same period last year. Adjusted EBITDA reached $8.8 billion.

The primary engine behind this growth is the company's Super Intelligence division. This segment generated approximately $7.6 billion, growing nearly 830 percent year-over-year. It has now become the largest contributor to total revenue. The Connectivity segment, which includes Starlink, delivered $5.2 billion. Strong subscriber additions pushed the total consumer base for Starlink to 13.6 million users.

Leadership provided guidance that further fueled the optimism. During the earnings call, CEO Elon Musk and CFO Bret Johnsen outlined revenue guidance for the first quarter of 2027. They projected figures between $33 billion and $37 billion. This range was substantially higher than the roughly $22 billion that analysts had modeled. The executives also detailed capital expenditure plans for the fourth quarter, ranging from $35 billion to $40 billion. These funds are earmarked for AI compute infrastructure, with specific sites including Memphis and Southaven.

Management is targeting 2.5 to 3 gigawatts of nameplate compute capacity by the end of this year. They discussed pathways to reach 13 gigawatts or more by the end of 2027. Musk cited relentless demand from hyperscalers and other customers. He noted that current compute pricing supports payback periods of less than a year, with some potentially as short as six months.

In response to these figures, a wave of price target increases hit the market. JPMorgan more than doubled its target to $500 from $240, maintaining an Overweight rating. Cantor Fitzgerald raised its target to $345 from $246. Barclays increased its target to $300 from $254, while Morgan Stanley held its Overweight rating with a $300 target. Other firms also moved higher, including Wells Fargo, which raised its target to $274 from $214, and Clear Street, which moved its target to $248 from $217. Citi, UBS, and TD Cowen also adjusted their targets upward.

Beyond the financials, the call highlighted several operational milestones. Starship achieved recent orbital success and deployed V3 satellites. The company noted momentum in Starlink enterprise pricing and rapid adoption of its Grok Bot. Management also discussed spectrum expansion plans and the formation of special committees to explore a possible combination with Tesla.

The market response was swift. SpaceX shares closed at $147.79 on October 20. In early premarket trading on October 21, the stock jumped roughly 8 percent. Investors are digesting the results and the newly elevated Street targets. The average analyst price target has moved higher, reflecting greater conviction in the company's trajectory across launch, connectivity, and AI, even as the scale of spending remains a focal point.