SpaceX Earnings Beat
SpaceX shares rose over 12% and kept climbing after the company beat on both the top and bottom line.
The AI, or "super intelligence," segment beat Wall Street estimates with revenue of $7.56 billion. The connectivity unit, Starlink, brought in $5.25 billion. Starlink had 13.6 million subscribers as of September 30, with average revenue per user of $69 per month.
The company announced an order backlog of about $63 billion. It is making an acquisition in the satellite space to expand its mobility business. Capital spending guidance came in below Wall Street estimates, which added to the boost. Efficiency gains showed up over the past few quarters.
On the Terrafab buildout, the first functional test check is set for May or June of 2027, with volume production by the third quarter of 2028.
Tesla-SpaceX Merger Possibility
Both Tesla (TSLA) and SpaceX formed special committees to study a merger. Elon Musk sees it as a good merger but wants all Tesla shareholders on board. Tesla stock rose 3% ahead of its earnings report later the same day.
Musk had to speak carefully about the subject because FCC rules limit what he can say.
Tesla's stock is now pegged to SpaceX. Until talks break down or the acquisition rumors end, the two will likely trade in tandem. The big open question is the takeout price: cash, or a mix of cash and equity, and what the conversion rate would be. Tesla has pulled back from its all-time highs and trades at a relatively cheap discount compared with its historical average over the past four to five years.
Both sides seem to agree synergies exist between the businesses. The question is the timeline - how fast they want to move, or whether a deal happens at all. If no acquisition occurs, Tesla goes back to being valued as an automotive business, and there are headwinds there, especially on the electric vehicle front. A Tesla shareholder would likely prefer an acquisition. The deal also feeds the long debate over whether Tesla is a car company or an AI and tech company, which affects how the stock reacts to earnings.
One added factor: Musk has become something of a diplomat worldwide through his business tie-ups, including China and the Shanghai factory. How much say foreign governments would want in a merged company is something other countries are watching closely.
Super Micro Preliminary Revenue Surge
Super Micro (SMCI) raised its preliminary revenue guidance to $18.5 to $19.5 billion, up from the prior $14.5 to $15.5 billion. Wall Street had expected about $15.23 billion, so the new midpoint sits more than 25% above the consensus estimate. Shares rose 11%.
Gross margin guidance improved to 12% to 12.5%, up from the previous 10.4% to 10.8%, showing efficiency gains and some added pricing power. Demand is clearly there. The company installed a new CFO from Western Digital (WDC) over the past week, a further positive, and there has been no negative news in the headlines over the past couple of months.
The stock has traded in a wide range over the past year. Sellers have appeared around the $45 to $50 level, which remains key resistance. If the stock can recapture that range, bulls could expect the momentum to continue.
The report marks a recovery from earlier-year stories, including accusations that Nvidia (NVDA) chips were being smuggled into China using hair dryers and dummy servers.
