SpaceX Earnings: Rockets Built the Empire, but AI is Driving Its Future
Author: Ruben Dalfovo, Investment Strategist
Date: October 21, 2026
Key Takeaways
- SpaceX's revenue surged by 161%, with artificial intelligence becoming its largest business segment.
- Starlink continues to be a significant profit driver, while a major acquisition boosts SpaceX's AI ambitions.
- Increased spending and a potential merger with Tesla present both opportunities and uncertainties.
Overview of Earnings Report
On October 20, 2026, SpaceX announced its third-quarter earnings, reporting a revenue of 14.6 billion USD, a remarkable increase of 161% compared to the previous year. The company achieved a net profit of 4.4 billion USD, reversing a prior loss of 1.1 billion USD and exceeding analyst expectations.
Shift in Business Focus
Notably, more than half of SpaceX's revenue now originates from its artificial intelligence sector, marking a significant shift from its traditional focus on rockets and satellites. This transformation indicates that SpaceX is evolving into a broader infrastructure and technology enterprise.
Business Segments
1. Super Intelligence Division
The Super Intelligence division emerged as a standout performer, generating 7.6 billion USD in quarterly revenue, reflecting an astonishing growth of approximately 830% year-over-year. This division focuses on developing AI models and software, as well as renting computing power to other firms. The growth is attributed to new contracts, increased adoption of its Grok software, and the acquisition of Cursor, an AI coding platform valued at 60 billion USD.
2. Starlink
Starlink, SpaceX's satellite internet service, remains a crucial revenue source, generating 5.2 billion USD in revenue (up 69%) and 2.4 billion USD in operating profit. With 13.6 million consumer subscribers, Starlink's recurring revenue model provides a stable financial foundation for the company.
3. Traditional Space Business
SpaceX's traditional rocket business generated 1.8 billion USD in revenue but faced a small operating loss. This highlights the interdependence between the rocket and satellite businesses, where profits from Starlink can fund further rocket development.
Potential Merger with Tesla
During the earnings call, Elon Musk expressed interest in a potential merger between SpaceX and Tesla, stating, “Do I think it would be a good idea? Yes.” Both companies are exploring this possibility, which could lead to synergies in technology and reduced costs. However, Musk cautioned that any merger would require shareholder approval and is not guaranteed.
Investor Insights
Investors are advised to:
- Focus on cash flow rather than just revenue growth, comparing AI revenue with investment spending.
- Evaluate the profitability of Starlink separately from the more uncertain AI and rocket ventures.
- Monitor the terms of any potential merger with Tesla to ensure it adds value without increasing risks.
Conclusion
SpaceX's latest earnings reveal a company that is diversifying its business model, with rockets supporting satellite operations and AI presenting new growth avenues. While the rapid revenue growth is promising, the challenge remains to convert this ambition into sustainable cash flow for investors.