Why SpaceX's stock is surging - and lifting the broader AI universe along with it

By Christine Ji

SpaceX just gave Wall Street a big reason to believe in the AI boom as demand for its computing power is off the charts

CEO Elon Musk said SpaceX could have up to 20 gigawatts of data-center capacity by the end of 2027.

Shares of SpaceX are on track for big gains after Tuesday's earnings call, which put the company's artificial-intelligence momentum on full display.

SpaceX's (SPCX) third-quarter revenue grew 161% from a year before to $14.6 billion, and the star of the show was its Super Intelligence division, which has grown nearly 830% over that span. For the first time in a quarter, SpaceX got more than half of its sales from this unit, which includes business functions like selling artificial-intelligence computing power.

The earnings call was also packed full of optimistic signals for the broader AI landscape, sending shares of companies like Nvidia (NVDA), Tesla (TSLA) and Intel (INTC) rising after the bell. Shares of specialized cloud providers -which sold off heavily last week on concerns of rising interest rates - were also rising in the extended session, with CoreWeave (CRWV) up 5% and Nebius (NBIS) up 6%.

SpaceX shares were ahead 8% in after-hours action on Tuesday.

CEO Elon Musk laid out ambitious targets of scaling the company's data-center capacity to potentially 20 gigawatts by the end of 2027, up from just 1.7 gigawatts at the end of the third quarter. And while investors have recently been concerned about the sustainability of demand for compute, or AI processing power, SpaceX's earnings call showed that the company is not seeing any sort of slowdown.

In fact, Musk said that SpaceX is "hounded relentlessly by every hyperscaler and by dozens of smaller companies to rent more of our compute." The pricing for computing power is currently extremely favorable for SpaceX, allowing the company to generate a payback in less than a year, with the possibility of achieving a six-month payback next year, the company said.

Outsized demand for both SpaceX's AI software and hardware rental offerings gave investors confidence that SpaceX will be able to handle its elevated spending plans. For the quarter that ends in December, SpaceX forecasts that it'll spend $35 billion to $40 billion on physical infrastructure, a significant jump from the $19.6 billion spent this quarter.

Investors were also pleased by the company's forecast for the coming quarters. SpaceX confirmed that its on track to reach an annual recurring revenue run rate of $100 billion by December. That metric could be between $500 billion and $1 trillion by the end of 2027, thanks to strong adoption of Grok Bot, Musk said on the earnings call.

For the first quarter of 2027, the company is aiming for revenue between $33 billion and $37 billion, with CFO Bret Johnson saying on the earnings call that the company has clearer visibility in its pipeline of computing contracts over the next six months.

That early first-quarter outlook is vastly ahead of the $22 billion that analysts tracked by FactSet were expecting for the period.

-Christine Ji

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10-20-26 1910ET