SpaceX Shares Rally After Strong Earnings and Higher Price Targets

Stockholders of SpaceX saw their investments gain value immediately after the company released its third-quarter 2026 results on Monday evening. The stock, which closed at $147.79 on October 20, jumped approximately 8 percent in early premarket trading on Tuesday. This movement reflects a broader shift in Wall Street sentiment as major firms updated their outlooks for the company's future performance.

The financial report revealed a dramatic turnaround for the space and technology firm. Revenue reached $14.6 billion, a 161 percent increase compared to the same period last year. This figure significantly exceeded the consensus estimate of roughly $12.7 billion. The company also reported a net profit of $4.4 billion, marking a return to profitability after a loss in the prior year. Adjusted EBITDA stood at $8.8 billion, further underscoring the strength of the quarter.

A primary driver of this growth was the Super Intelligence division, which generated about $7.6 billion in revenue. This segment grew nearly 830 percent year-over-year and became the largest contributor to the company's income. The Connectivity segment also performed well, delivering $5.2 billion in revenue. Subscriber growth for Starlink pushed the consumer base to 13.6 million users, highlighting continued demand for satellite internet services.

During the earnings call, CEO Elon Musk and CFO Bret Johnsen provided guidance for the first quarter of 2027. They projected revenue between $33 billion and $37 billion, a figure far above the approximately $22 billion that analysts had previously modeled. The company also outlined capital expenditure plans for the fourth quarter ranging from $35 billion to $40 billion. These funds are earmarked for expanding AI compute infrastructure at locations such as Memphis and Southaven.

Management indicated plans to reach 2.5 to 3 gigawatts of nameplate compute capacity by the end of this year. They also discussed pathways to expand to 13 gigawatts or more by the end of 2027. Musk noted strong demand from large technology customers, stating that compute pricing supports payback periods of less than a year. Some scenarios even suggest returns in as little as six months.

In response to these figures, numerous investment firms raised their price targets. JPMorgan more than doubled its target to $500 from $240, maintaining an Overweight rating. Cantor Fitzgerald lifted its target to $345, while Barclays and Morgan Stanley both set targets at $300. Other firms, including Citi, UBS, and TD Cowen, also adjusted their projections upward. Analysts cited the strong quarterly results, expanding AI capabilities, and progress in Starship development as key factors driving these changes.