SpaceX revenue jumped 161% to $14.6B with a $4.4B profit as Musk floated a Tesla merger. Kospi rose 3.3%, Netflix fell 8%, and Tesla and Meta report tonight.
TLDR
- SpaceX reported third quarter revenue of $14.6 billion, up 161% from a year ago and well above the $12.72 billion analysts expected. Net income was $4.4 billion, its first profitable quarter as a public company.
- Elon Musk said Tesla and SpaceX have each formed special committees of independent directors to discuss a merger, at the request of shareholders. No terms have been agreed.
- SPCX was up about 9.9% to $161.21 on CoinDCX Global Futures at 3:21 PM IST, and TSLA was up about 2.8% to $379.06.
- The Kospi rose 3.29% to 5,735.66, undoing most of Tuesday’s 3.73% slide. SK Hynix gained 5.81% and Samsung Electronics 5.67%.
- Netflix guided fourth quarter revenue below estimates and cut its ad revenue outlook. NFLX is down about 8.2% on the app.
- Tesla and Meta both report after the US close, at about 1:30 AM IST on Thursday.
Market Regime
The market is being pulled in two directions by the same theme. On one side, companies that sell AI capacity are showing real money. SpaceX said its AI business, which rents out computing power, grew its revenue to $7.6 billion in the quarter, and Super Micro raised its sales outlook on Tuesday evening. Those two reports were enough to send memory chip stocks in Seoul sharply higher this morning, a day after they hit their lowest close since April.
On the other side, doubts about AI spending have not gone away. Citadel founder Ken Griffin said the market is almost certainly in an AI bubble, and the 15 biggest S&P 500 stocks now make up a record 46.7% of the index. Tuesday showed the split clearly: the average stock rose while big tech went nowhere. Tonight’s results from Tesla and Meta are the next test. A strong outlook from Meta on AI spending could extend this morning’s chip rally. A weak one, as Netflix just showed, could matter more than the quarter itself.
Bullish Factors
- SpaceX beat on nearly every line: Revenue of $14.6 billion beat estimates by about $1.9 billion, adjusted EPS of 35 cents was more than double the 15 cents expected, and adjusted EBITDA rose 306% to $8.8 billion.
- Starlink still earns most of the profit: The Connectivity business, which includes Starlink, brought in $5.2 billion of revenue and about $2.4 billion of operating income.
- A bigger outlook: SpaceX guided first quarter 2027 revenue to $33 billion to $37 billion, and Musk said yearly revenue could run at $500 billion to $1 trillion by the end of 2027.
- Super Micro raised its forecast: The AI server maker lifted its quarterly revenue outlook to $18.5 billion to $19.5 billion, and the stock jumped about 12.7% after hours on Tuesday.
- Foreign money returned to Korea: Foreign investors bought SK Hynix for the day after about 10 weeks of steady selling in Korea’s two big chipmakers.
Bearish Factors
- AI bubble warning: Ken Griffin said companies are struggling to turn AI spending into real productivity gains, though he remains positive on AI over the long term.
- Too few stocks carry the index: The 15 biggest S&P 500 stocks are a record 46.7% of the index, compared with 27.2% at the peak of the 2000 dot-com bubble, per Kobeissi.
- Netflix stumbled: It guided fourth quarter revenue to $13.4 billion against $13.5 billion expected and cut its 2026 ad revenue outlook to $2.7 billion from $3 billion.
- Merger is far from certain: Musk said a combination should not be assumed. Tesla would need approval from holders of 50% of all its shares, not just those who vote.
- Oil and Iran: Brent crude came close to $112 on Tuesday before settling at $108.79. A source said reports of a near US and Iran deal are wrong, and two tankers were set ablaze after hitting mines near Hormuz.
Asian Markets This Morning
Asia’s chip markets bounced back on Wednesday after a rough Tuesday, led by Korea.
- Kospi: up 3.29% to 5,735.66. It was up more than 4% at one point, and the Korea Exchange briefly paused program buying for five minutes, the first buy-side sidecar in about two months.
- SK Hynix: up 5.81% to 1,294,000 won. Samsung Electronics: up 5.67% to 223,500 won. Both were up 7% to 8% in the morning before giving back part of the gains.
- Kosdaq: up 1.38% to 792.76.
- Nikkei 225: up 0.85% to 64,621.24, with Kioxia up nearly 3%.
- On Tuesday, the Kospi had fallen 3.73% to 5,552.75, its lowest close since April 7, and the Hang Seng fell 1.32% to 23,867.74.
What Moved Wall Street Today
Tuesday was a broad rally that left big tech behind. Most stocks rose on strong earnings and lower bond yields, while the largest AI names took a breather.
- Dow Jones: 52,495.88, up 1.02% or 529.85 points, led by 3M, which rose 5.78% after raising its profit forecast.
- S&P 500: 7,712.57, up 0.28%.
- Nasdaq Composite: 26,424.82, down 0.02%, as Apple fell 1% and Meta fell 1.59%, its fifth straight decline.
- Russell 2000: 2,773.42, up 1.65%, leading the major indexes.
- Earnings winners: Equifax rose 11.33% and Hasbro 11.20%. General Motors fell 6.84% despite beating estimates and announcing a $20 billion buyback.
- The US 10-year Treasury yield fell to 5.12% after weak housing data. September housing starts dropped 5.2%.
- Markets now price about an 87% chance the Fed holds rates at its October 27 to 28 meeting.
Assets in Focus
SPCX
SpaceX is the story of the day. Revenue rose 161% to $14.6 billion and net income was $4.4 billion, compared with a loss of about $1.1 billion a year ago. The biggest change was its AI business, where revenue jumped to $7.6 billion as cloud computing contracts ramped up. Starlink still earns most of the profit. SPCX was up about 9.9% to $161.21 on the app this afternoon. The level to watch is $146.71, where it traded 24 hours ago before the results.
TSLA
Tesla now carries two stories into tonight. The first is its own third quarter report at about 1:30 AM IST, with a live Q&A at 3:00 AM IST, after a delivery beat earlier this month. The second is the merger. Musk said there is a lot of merit to combining the two companies, but also said it should not be assumed. TSLA was up about 2.8% to $379.06 on the app. $368.87, where it traded 24 hours ago, is the level to watch if results disappoint.
SKHY
SK Hynix rose 5.81% in Seoul after a 4.23% drop on Tuesday, helped by Super Micro’s raised outlook and the first day of foreign buying in weeks. SKHY was up about 5.8% to $144.08 on the app. Tuesday’s slide shows how quickly AI spending doubts can return, and $136.19, where it traded 24 hours ago, is the price it needs to stay above.
META
Meta reports after the US close, with its call at 2:00 AM IST on Thursday. The stock has fallen five sessions in a row going into the print. Traders will focus on two numbers: how much Meta plans to spend on AI next year, and whether ad growth is keeping pace. META was down about 1.3% to $693.39 on the app.
NFLX
Netflix is the warning for tonight. Its third quarter was solid, but a softer fourth quarter revenue outlook and a lower ad revenue forecast sent the stock down about 8.2% to $64.47 on the app. $70.25, where it traded before the results, is now the level above.
Index Levels to Watch
- S&P 500 (7,712.57): 7,650 below, 7,800 above.
- Nasdaq Composite (26,424.82): 26,200 below, 26,700 above.
- Dow Jones (52,495.88): 52,000 below, 52,750 above.
- Kospi (5,735.66): 5,552 below, Tuesday’s close, and 6,035 above, the October 13 close.
Disclaimer
Cryptocurrencies and futures are unregulated virtual assets, not legal tender, and subject to market risk. The information above is for education and general awareness only. It is not investment advice or a recommendation to buy, sell, or hold any asset. Levels and estimates are reference points for context, not entry or exit signals. Please do your own research and consult a registered advisor before making investment decisions.
