SpaceX earnings: Wall Street hikes price targets on AI and Starlink surge

Investors in California and across the nation saw a significant shift in sentiment toward SpaceX (NASDAQ: SPCX) as stock prices climbed in early premarket trading on Monday. The move came in direct response to the company's release of third-quarter 2026 financial results following the close of business on October 20. This surge represents a tangible change for shareholders, with shares jumping approximately 8 percent from their previous closing price of $147.79.

The primary driver for this rally was a set of financial figures that far exceeded market expectations. SpaceX reported total revenue of $14.6 billion, a year-over-year increase of 161 percent that surpassed the consensus estimate of approximately $12.7 billion. The company also swung to a net profit of $4.4 billion, reversing a loss recorded in the same period the prior year. Adjusted EBITDA reached $8.8 billion, further signaling operational strength to the market.

The most compelling aspect of the report for analysts was the outlook for the coming year. During the earnings call, CEO Elon Musk and CFO Bret Johnsen provided revenue guidance for the first quarter of 2027 ranging from $33 billion to $37 billion. This forecast was substantially higher than the roughly $22 billion that analysts had previously modeled. Additionally, management outlined capital expenditure plans for the fourth quarter of $35 billion to $40 billion, with the majority of spending directed toward AI compute infrastructure at sites in Memphis and Southaven.

The rapid growth in the company's Super Intelligence division was a central theme of the earnings call. This AI-focused segment generated roughly $7.6 billion in revenue, becoming the largest contributor to the company's overall income. Growth in this area was nearly 830 percent year-over-year. Management noted that demand from hyperscalers remains relentless, with compute pricing allowing for payback periods of less than a year and potentially as short as six months. They are targeting 2.5 to 3 gigawatts of nameplate compute capacity by the end of the year, with pathways discussed for reaching 13 gigawatts or more by the end of 2027.

The connectivity segment also performed well, delivering $5.2 billion in revenue. The consumer base for Starlink grew to 13.6 million subscribers due to strong additions. Other operational highlights included recent orbital successes for Starship and the deployment of V3 satellites. The company also noted rapid adoption of Grok Bot and plans for spectrum expansion. Notably, special committees were formed to explore a possible combination with Tesla, adding another layer of strategic interest to the stock.

In reaction to these figures, a wave of price target increases swept through Wall Street. JPMorgan more than doubled its target to $500 from $240 while maintaining an Overweight rating. Cantor Fitzgerald raised its target to $345 from $246, and Barclays increased its to $300 from $254. Citi and UBS both maintained Buy ratings, with targets moving to $240 and $230 respectively. TD Cowen raised its target to $224 from $200. Morgan Stanley held its Overweight rating with a $300 target, while Wells Fargo and Clear Street adjusted their targets to $274 and $248 respectively.

Analysts broadly cited the strong quarterly performance, the acceleration in AI compute expansion, and progress in the Starlink business as key drivers for their optimistic views. The consensus suggests that the company's long-term growth and earnings power are higher than previously thought. The elevated spending on infrastructure is viewed as a necessary investment to capture the current demand for AI capabilities.

Despite the bullish reception, questions remain regarding the scale of future capital expenditures. The planned $35 billion to $40 billion spend in the final quarter is significant, and investors will be watching how efficiently this capital is deployed. The average analyst price target has moved higher, reflecting greater conviction in the company's trajectory across its launch, connectivity, and AI businesses, though the intensity of competition and capital requirements remain points of focus for the coming quarters.