SpaceX beats Wall Street. AI now generates more than half its revenue

SpaceX reported third-quarter fiscal 2026 results on October 20, with revenue up 161% to $14.6 billion and an operating margin of 19%. SPCX shares jumped from $147.79 to $160.36 in after-hours trading, a gain of roughly 8.5%. The company, still widely thought of as a rocket maker, now gets more than half its revenue from artificial intelligence.

Wall Street had been expecting a big quarter. SpaceX delivered an even bigger one. Revenue forecasts ranged from roughly $12.7 billion to $13 billion, depending on the consensus provider, putting the beat at $1.6 billion–$1.9 billion, or about 12–15%. CNBC cites LSEG estimates of $12.72 billion against actual revenue of $14.58 billion. GAAP diluted earnings reached 35 cents a share. CNBC separately reports adjusted earnings of 45 cents a share against expectations of 13 cents. The measures differ, but the verdict is clear: SpaceX comfortably beat the Street.

“Earnings per share: 45 cents adjusted vs. 13 cents expected.” — CNBC

Super Intelligence, the division encompassing xAI and X, drove the growth. Revenue surged 830% year over year to $7.6 billion, accounting for 52% of group sales. Its operating margin reached 6%, an improvement of 218 percentage points. Across SpaceX, operating profit hit $2.8 billion and the operating margin rose from 2% to 19%. AI has become the biggest revenue contributor while moving from deep operating losses into profit.

Some of that growth arrived through acquisition. SpaceX closed its purchase of AI code editor Cursor on August 14, in a $60 billion all-stock deal. According to the quarterly earnings release, Cursor contributed $608 million between closing and September 30—roughly 8% of Super Intelligence revenue. That 830% growth rate therefore includes acquired sales, alongside new cloud contracts and increased Grok adoption. Cursor also brings an established paid product and a developer audience. With infrastructure spending at this scale, the appeal is straightforward: put the group's computing capacity and models behind a tool customers already pay to use.

Starlink remains the profit engine. Its $5.2 billion in revenue was up 69%, with an operating margin of 45%. Applying that margin to the rounded revenue figure gives roughly $2.3 billion in operating profit—the bulk of the group's total. Subscribers reached 13.6 million, up 89% from a year earlier, while average revenue per user fell 17% to $69. Revenue per subscriber is falling, but subscriber growth is more than making up the difference.

The Space segment generated $1.8 billion in revenue, up just 6%, with an operating margin around zero. SpaceX completed 35 launches during the quarter, down 20% year over year. Rockets now account for roughly an eighth of consolidated revenue. SpaceX still conjures up launchpads and spacecraft; its accounts increasingly describe a connectivity and computing company.

Bullish analysts had raised their expectations ahead of the release. On October 16, Evercore ISI's Kutgun Maral raised his price target from $230 to $275, maintaining an Outperform rating. That was a pre-earnings target, rather than a revision prompted by these results. The share-price jump came after SpaceX cleared a consensus that already assumed rapid growth, with some of its strongest backers raising their expectations before the numbers landed.

The biggest bill was capital expenditure: $19.6 billion for the quarter, including $16.4 billion for Super Intelligence. SpaceX spent $1.34 on capital investment for every dollar of quarterly revenue, and AI absorbed about 84% of that investment. The composition of earnings matters, too. Net income of $4.4 billion included $2.8 billion in operating profit, $1.2 billion from interest and other items, and a $400 million tax benefit. A 30% net margin looks impressive. The 19% operating margin offers a clearer measure of profitability from running the business.

We recently covered how disappointment over OpenAI's revenue helped wipe roughly $500 billion off the market valuations. SpaceX delivered the other side of that trade: results outpaced expectations, and investors marked the shares higher. The next test carries a bigger price tag. Its AI division now has to justify $16.4 billion in quarterly capital spending as well as analysts' forecasts. Wall Street has rewarded the revenue growth. The bill for sustaining it is already here.