SpaceX has reported $14.6 billion in quarterly revenue, marking the first profitable quarter in the company’s history and stunning Wall Street analysts who had written off the stock as massively overvalued following its IPO.
The figure represents more revenue than SpaceX generated in the entirety of the previous year, and it was driven primarily not by rockets or satellites, but by artificial intelligence compute.
SpaceX’s AI business line tripled over the past three months, eclipsing Starlink revenue for the first time and pulling in approximately $7.6 billion, representing an 830% increase from the prior quarter.
The company has emerged as the top neocloud provider in the world, renting compute capacity to some of the largest AI labs on the planet, including Anthropic, which is paying $1.25 billion per month, and Google, which is paying approximately $965 million per month.
Reflection AI has also committed $6.3 billion to secure compute access from SpaceX, underscoring the extraordinary level of demand that is currently outpacing available supply.
The pivot was enabled by SpaceX’s acquisition of XAI, which gave the company the largest GPU stockpile of any organization globally, housed across three data centers named Colossus 1, Colossus 2, and Colossus 3.
SpaceX is currently bringing online approximately 200,000 Nvidia (NASDAQ: NVDA) GPUs per month, at a cost of roughly $13.1 billion worth of hardware per month, a pace no other company has matched.
A key competitive advantage has been SpaceX’s ability to solve the power bottleneck that is crippling rivals, with Amazon and Microsoft (NASDAQ: MSFT) both reported to have billions of dollars worth of GPUs sitting idle due to insufficient energy grid access and permit delays.
SpaceX has addressed this by repurposing rocket manufacturing workshops to build gas turbines that are deployed on-site at data centers, bypassing grid access constraints and allowing GPUs to come online faster than competitors.
Elon Musk is projecting between $500 billion and $1 trillion in annualized recurring revenue for 2027, while JPMorgan has issued a new price target of $500 per share and independently forecasts $254 billion in revenue next year.
Capital expenditure this quarter reached $19.6 billion, with Musk targeting $35 billion to $40 billion in capex spending next quarter as the company races to scale compute capacity toward a projected 10 to 20 gigawatts by the end of next year.
In a significant development, Musk confirmed on the earnings call that shareholders from both SpaceX and Tesla have formed special committees to formally discuss a potential merger between the two companies, with Musk recusing himself due to conflicts of interest.
When asked whether he believed the merger was a good idea, Musk’s answer was simply yes, fueling speculation the deal could be announced before the end of the year.
The strategic logic centers on combining SpaceX’s compute infrastructure and Starlink internet network with Tesla’s fleet of connected vehicles, Optimus humanoid robots, and the vast sensor and camera data those devices continuously generate.
SpaceX also used the earnings call to discuss TerraFab, an ambitious chip manufacturing facility targeting 100,000 wafers per month before 2030 and up to 1 million wafers per month within a decade, with an initial investment of $16.8 billion in the first phase.
Musk noted on the call that demand for compute is far exceeding current supply, stating that if SpaceX had several times more compute available today, it would have been able to sell all of it multiple times over.
Short-term compute lease contracts of three to twelve months, sold at a premium to clients including competitors like Anthropic, have allowed SpaceX to simultaneously generate revenue while retaining enough capacity to train its own frontier AI models.
Despite the record results, risks remain substantial, including the complexity of transitioning from GB 300 GPUs to the next-generation Vera Rubin architecture, ongoing regulatory and grid constraints, and an unusually aggressive share unlock schedule tied to valuation milestones.
SpaceX stock was up approximately 9% at the time of the earnings report, and while the quarter represents a dramatic turnaround from the more than 50% post-IPO drawdown the stock experienced earlier this year, analysts caution that Musk’s revenue projections should be weighed carefully against execution risk.
