SpaceX Profit Takes the Bid Tesla Used to Own

SpaceX shares finished nearly 8% higher on Wednesday after the rocket company posted its first profit as a public company and Elon Musk confirmed Tesla merger talks. The Nasdaq Composite rose 1.1% to 26,702.86, and the Dow Jones Industrial Average gained 0.7% to 52,856.09.

Tesla’s profit then fell 43% after the close and the stock slipped about 2% after hours, while Meta climbed through a $25 billion privacy penalty in New Mexico.

Compute Paid for the First Public Profit

SpaceX, listed as SPCX since its June 12 debut at $135 a share, reported third-quarter results on Tuesday night that flipped the AI-infrastructure tape. An 8-K posted revenue of $14.6 billion, up 161% from $5.6 billion a year earlier, with income from operations of $2.8 billion and net income of $4.4 billion against a year-ago loss of $1.1 billion.

Adjusted EBITDA was $8.8 billion, up 306% from $2.2 billion. Diluted earnings were $0.35 a share. The print was the first quarterly profit since the listing, after losses earlier this year.

The growth engine was Super Intelligence, the compute-leasing and software slice, at $7.6 billion, up from $813 million a year earlier. Connectivity, mostly Starlink, rose 69% to $5.2 billion. The launch business, still branded Space, was $1.8 billion, up 6%.

SPACEX Q3 SEGMENT REVENUE

CFO Bret Johnsen said revenue grew 161% on Connectivity momentum and “a clear inflection in our Super Intelligence business.” Nameplate compute reached 1.7 GW at September 30. Starlink ended the quarter with 13.6 million subscribers. Capital spending was about $19.6 billion. Johnsen guided first-quarter 2027 revenue to $33 billion to $37 billion, against an average estimate of $22.2 billion.

The company also flew its first revenue Starship mission, putting 26 Starlink V3 satellites on orbit. Cloud deals named around the print include Anthropic, Google, and Reflection AI. Shares rose as much as 10% on Wednesday before settling at a nearly 8% gain.

Musk Recused Himself From Both Merger Committees

The number that moved Tesla in the regular session was not a car delivery. On the SpaceX call, Musk said both boards had formed special committees of independent directors, at shareholder request, to study a combination of a company worth about $2 trillion with Tesla at about $1.5 trillion. Combined, that is about $3.5 trillion, which would rank as the largest merger on record if terms are ever signed.

I do think there’s a lot of merit to combining the companies as we are pretty much in the Super Intelligence singularity, and there’s a lot to be gained from cooperating.

Elon Musk, Chief Executive, SpaceX third-quarter earnings call

Asked whether a tie-up would be wise, he said, “Do I think it would be a good idea? Yes.” He also said treating a deal as certain “would be overstating it,” that no agreement has been reached, and that shareholders have to support it. He described talking about the idea as “tap dancing through a minefield.” He owns nearly a fifth of Tesla and just under half of SpaceX, so he recused himself from both committees.

WHAT WE KNOW

• The committees: Independent directors at SpaceX and Tesla are studying a combination, and Musk has recused himself as a conflicted holder.
• Musk’s view: He said a merger would be a good idea and that there is a lot of merit to combining the companies.
• No terms: He said an agreement has not been reached and that assuming a deal is certain would be overstating it.

WHAT IS UNCONFIRMED

• The structure: A person familiar with the matter has said talks in recent weeks could have SpaceX acquiring Tesla, with Tesla using a bank, but nothing has been filed.
• The timetable: No shareholder vote, ratio, or cash mix has been set.

The fairness fight is already the merger. SpaceX now books the AI compute revenue that Tesla holders spent years being told was theirs. xAI’s talent and chip access sat closer to Musk’s rocket company than to the car company, and Super Intelligence’s $7.6 billion quarter makes that allocation visible on an income statement. Holders who rode flat car sales are in no mood to swap Tesla in cheap so SpaceX can buy growth with a richer currency.

Why Tesla’s Profit Fell 43% After the Beat

Non-GAAP earnings of $0.48 a share beat the $0.45 consensus, but GAAP net income dropped to $787 million, or $0.22 a share, as auto revenue slipped 3%, energy revenue fell 16%, and operating expenses jumped 39%. That is the 43% profit decline against $1.37 billion a year earlier, on sales of $28.05 billion that were roughly flat on $28.1 billion and in line with the $28.06 billion FactSet average.

Tesla posted Tesla’s third-quarter 2026 update after the close. Operating income was $718 million, down 56%, for a 2.6% operating margin. Operating expenses were $4.78 billion. Research and development rose 69% to $2.76 billion. Free cash flow was $1.5 billion, and capital spending was $4.73 billion.

TESLA Q3 SNAPSHOT

• The cars: Automotive revenue was $20.6 billion, down 3%, with regulatory credits of $113 million against $417 million a year earlier, a 73% drop.
• The miss: Energy generation and storage revenue of $2.88 billion, down 16%, missed the $3.72 billion company-compiled energy-storage estimate, even as deployments rose 10% to 13.7 GWh.
• The software: Active FSD subscriptions reached 1.74 million, up 67%, and FSD (Supervised) was attached to over 75% of new North American deliveries.
• The factory: Deliveries were 486,532 against production of 464,391, and Tesla said battery supply, not demand, capped auto volume, with the largest passenger backlog in four years.

Services and other revenue rose 33% to $4.61 billion. Automotive gross margin excluding credits was 18.1%. Cybercab joined the Austin Robotaxi fleet on September 3, and cumulative unsupervised Robotaxi miles were nearly 2 million. Tesla also produced and delivered its 10 millionth vehicle.

On the Tesla call, Musk declined to add to Tuesday’s merger comments. The regular session had already priced the committees, with Tesla up as much as 4%. After hours the stock gave back about 2% once the profit drop and the energy miss were on the tape. The merger option reopened the bid. The car company’s own numbers closed it.

Meta Rose Through a $25 Billion Privacy Penalty

Meta reported third-quarter revenue of $64.6 billion, up 26% and above the $63.37 billion LSEG average, and the shares rose as much as 7%. GAAP earnings were $3.83 a share on net income of $9.86 billion. Adjusted earnings were $7.40 a share against a $5.46 consensus, after a $9.89 billion charge tied to an approximately $18.59 billion settlement with state attorneys general over teen safety claims.

Hours before the print, Santa Fe District Court Judge Francis Mathew ordered Meta to pay New Mexico $25 billion. Jurors had found 26 of 29 company statements misleading and counted 43,899,720 violations of the state’s Unfair Practices Act. The statutory math at $5,000 a violation is $219.4986 billion; Mathew wrote that a penalty above $219 billion was warranted, then reduced it to $25 billion in the same judgment. Interest runs at 15% a year until paid, or $3.75 billion a year. Attorney General Raúl Torrez called it one of the largest, if not the largest, single-state verdicts against a company in American history. Meta Chief Legal Officer C.J. Mahoney said the company is confident it will win on appeal and that the ruling “makes it all but impossible to do business in the state of New Mexico.”

The $25 billion order is not the $9.89 billion already sitting in the quarter. Meta will fight the New Mexico figure. CFO Susan Li told analysts the firm continues to monitor legal and regulatory matters that could affect results, and she pointed to more youth-related trials still ahead. Fourth-quarter revenue was guided to $73 billion to $76 billion. Advertisers kept spending: ad impressions rose 10% and average price per ad rose 14%.

Super Micro’s Preliminary Sales Land $4 Billion High

The other AI-hardware bid on the tape came from Super Micro Computer. In a preliminary first-quarter sales update for the period ended September 30, the server maker put revenue at $18.5 billion to $19.5 billion against August guidance of $14.5 billion to $15.5 billion, a $4 billion gap at the midpoint, and gross margin at 12.0% to 12.5% against 10.4% to 10.8%. Management credited AI-platform demand and mix. The full call is set for November 3. SMCI closed at $35.55, up 9.5%.

WEDNESDAY CLOSES

The S&P 500’s 44.60-point gain pulled it closer to the record it set earlier in October. SpaceX’s compute print did more for that risk tone than Tesla’s car margins. AT&T was a large-cap loser, down about 6.5% despite an earnings beat. Netflix, which had reported a day earlier, kept absorbing price-target cuts.

TUESDAY OIL PRINTS

• WTI: U.S. crude fell nearly 2% on Tuesday to $101.79 a barrel as talk of diplomacy with Iran cooled the tape.
• Brent: The international contract slipped 0.69% to $108.79.
• Wednesday tone: Brent was off about 0.2% during Wednesday’s session after that reversal, a quieter energy move than the AI-server bid.

Tuesday’s oil drop had already helped the Dow. Wednesday belonged to SpaceX, Super Micro, and the chips that Jensen Huang talked up in a Berlin keynote.

Thursday’s Unlock Frees up to 1.3 Billion Shares

The IPO lock-up schedule makes up to 1.3 billion additional SpaceX shares eligible to trade on Thursday, October 22, the second full session after the Q3 print, or 28% of the main 180-day pool. Earlier staged releases since August did not wreck the stock, but this is the largest single window so far. Musk’s own holding stays locked until June 12, 2027. The standard 180-day term for most pre-IPO holders ends December 8.

THE SPACEX PRINT-TO-UNLOCK WINDOW

1. October 20, 2026: SpaceX reports Q3 after the close and Musk confirms Tesla merger committees; Super Micro issues its preliminary update.
2. October 21, 2026: SpaceX rallies as much as 10% and finishes nearly 8% higher; Nasdaq closes up 1.1%; New Mexico files the $25 billion Meta judgment at 10:51 a.m.; Tesla and Meta report after the bell.
3. October 22, 2026: Up to 1.3 billion SpaceX shares become eligible to sell under the IPO lock-up calendar.

Wednesday paid SpaceX for compute growth and for a merger option Tesla holders have not agreed to price. Tesla got an EPS beat, a 43% profit drop, and a chief executive who would not revisit the minefield on his second call in two nights. Meta showed that a $25 billion state verdict can land on earnings day and still lose to a 26% ad-revenue gain. The unlock on October 22 is the first test of whether that bid holds once more stock can actually be sold.

Disclaimer: This article is news reporting and analysis of market moves, earnings releases, and court orders, and it is for information only. It is not investment advice, a recommendation to buy or sell any security, or a prediction of merger terms, lock-up selling, or appeal outcomes. Readers should consult a licensed financial adviser or securities attorney before acting on any stock, option, or deal speculation discussed here. Figures, trading levels, and case statuses reflect the company filings, court judgment, and market prints cited above and can change with later trading, restated results, or further court action.