SpaceX rallies after hours as quarterly results top estimates

What did SpaceX report for the quarter?

Space Exploration Technologies Corp. (Nasdaq: SPCX) reported third-quarter revenue and earnings per share above analyst estimates after Tuesday's close. Earnings per share is profit divided by the number of shares, and it is the figure most reports are graded on.

Why it matters: Both results cleared the consensus, the average analyst forecast that acts as the bar for a beat. The shares rose 8.1% in after-hours trading to $159.70.

By the numbers: Earlier, in the regular session, the stock edged down 0.1% to close at $147.79. The company lost $2.2 billion in market value on the day. Its total market value stands at $1.9 trillion.

What drove the quarterly results?

The company said growth came mainly from its Super Intelligence segment, which sells AI computing capacity. Faster growth in Connectivity, the unit that includes Starlink satellite internet, also helped.

The Space segment, which launches rockets for paying customers, grew more slowly. SpaceX said its launch revenue included a paying Starship mission. Starlink subscribers also increased, according to the company.

On the earnings call, Elon Musk said demand for AI computing still outruns supply. He said the shortage could last for years and that short-term computing contracts are renewing at higher prices. "So I don't think we're going to have a demand issue here," Musk said.

Shay Boloor, chief market strategist at Futurum Equities, said the comments point to a chip shortage that reaches across nearly every major chip design.

What questions remain after the results?

The other side: Spending is one. SpaceX said it expects capital spending to climb further before year-end as more capacity comes online. That is the money it puts into computing centers, Starship, and satellite production.

Starlink's mobile ambitions are another. MoffettNathanson analyst Julie Zhu questioned whether Starlink can compete economically with AT&T, T-Mobile, and Verizon. She noted those carriers control far more spectrum, the airwaves a phone network uses. Bernstein analyst Madison Rezaei argued SpaceX could partner with existing carriers instead.

Bank of America analyst Ron Epstein said the company's long-term revenue targets matter most. He said Bank of America's projections reach those goals later than management's timeline. Goldman Sachs repeated its buy rating and raised its price forecast before the report.

What could happen next for the stock?

What’s next: After-hours trading takes place once the regular session ends, with far fewer buyers and sellers. Moves in that window often shrink or reverse when the full market opens on Wednesday.

Before the release, the stock sat 26.8% below its 52-week high of $201.80, its highest price over the past year. Reports said a steady run of profits could help SpaceX qualify for the S&P 500 down the road.

Broader checkpoints are also on the calendar. The Federal Reserve announces its interest-rate decision on Wednesday, Oct. 28, and the advance estimate of third-quarter GDP follows on Oct. 29.