SpaceX shares rise as AI revenue rockets 830% and profit hits US$4.4 billion

Shares of SpaceX Corp (NASDAQ:SPCX) experienced a nearly 3% increase in after-hours trading following the company's announcement of a significant profit turnaround, primarily fueled by an astonishing 830% rise in revenue from its artificial intelligence sector.

For the third quarter, SpaceX reported a revenue of $14.6 billion, more than doubling from the same period last year. The company's net income soared to $4.4 billion, a stark contrast to the $541 million loss reported in the previous quarter.

A major contributor to this financial success was SpaceX's artificial intelligence division, which saw revenues climb to $7.6 billion after the acquisition of Elon Musk's xAI business in February. This segment, now rebranded as SpaceX Super Intelligence, generates income from the Grok chatbot and from leasing data center capacity to other AI firms.

In addition to AI, SpaceX's connectivity division, which encompasses Starlink, recorded $5.2 billion in revenue for the quarter, marking an almost 70% increase compared to the previous year. The number of Starlink subscribers surged by 88.9%, reaching a total of 13.6 million, highlighting the rapid growth of the satellite internet service.

Revenue from SpaceX’s traditional space operations also saw a rise, increasing by 6% to $1.8 billion. However, capital expenditures escalated significantly, totaling $19.6 billion for the quarter, a considerable jump from $6.9 billion in the same quarter last year. This increase reflects SpaceX's heightened investment in artificial intelligence, satellite technology, and launch infrastructure.

SpaceX had its initial public offering in June at $135 per share, with the stock briefly soaring above $225 before settling below the IPO price. Following the latest earnings report, the stock rebounded to approximately $148, leading to a company valuation of around $2 trillion.

The timing of these results coincides with scrutiny surrounding SpaceX's Starlink services in Ukraine. Reports from The Wall Street Journal indicate that Musk ordered a reduction in the capabilities of a military-grade version of Starlink that is utilized by Ukrainian forces, according to U.S. officials and sources familiar with the situation.

This decision reportedly resulted in slower connection speeds for some Ukrainian equipment, which in turn limited the effectiveness of specific offensive and interceptor drones. Furthermore, it was revealed that Musk and former U.S. President Donald Trump had discussions regarding the Starlink limitations around the time they became public, drawing more attention to the critical role SpaceX's satellite network plays in military operations.