SpaceX earnings spark Wall Street target surge

SpaceX triggered a rapid increase in Wall Street price targets after releasing third quarter results on October 20. The company reported strong financial performance that exceeded market expectations, leading to a sharp rise in its share price during after-hours and premarket trading on October 21. Investors responded positively to the detailed outlook provided by company executives during the accompanying earnings call.

The financial report highlighted substantial growth across the company's core operations. Revenue reached $14.6 billion, representing a 161 percent year-over-year increase. This figure comfortably surpassed the consensus estimate of approximately $12.7 billion. The company also transitioned from a net loss in the same period last year to a net profit of $4.4 billion. Adjusted EBITDA climbed to $8.8 billion, further solidifying the company's financial position.

A major driver of the bullish sentiment was the expansion of the Super Intelligence division. This AI-focused unit generated roughly $7.6 billion in revenue, making it the largest contributor to the company's total income. The segment grew by nearly 830 percent compared to the previous year. Meanwhile, the Connectivity segment delivered $5.2 billion in revenue. Strong subscriber growth helped lift the consumer base for Starlink to 13.6 million users, reflecting continued momentum in the satellite internet market.

Management provided specific guidance that significantly outpaced analyst models. CEO Elon Musk and CFO Bret Johnsen outlined first quarter 2027 revenue projections of $33 billion to $37 billion. This range was far higher than the roughly $22 billion previously modeled by the Street. The company also announced fourth quarter capital expenditure plans of $35 billion to $40 billion. These funds are earmarked for AI compute infrastructure at sites including Memphis and Southaven, with targets of 2.5 to 3 gigawatts of capacity by year-end.

The earnings call also featured updates on various strategic initiatives. Musk noted relentless demand from hyperscalers, stating that compute pricing supports payback periods of less than a year. The company discussed pathways to reaching 13 gigawatts of capacity by the end of 2027. Additional highlights included the recent orbital success of Starship, V3 satellite deployment, and rapid adoption of the Grok Bot. Special committees have also been formed to explore a potential combination with Tesla.

Analysts reacted with a wave of upward revisions to their price targets. JPMorgan more than doubled its target to $500 from $240, maintaining an Overweight rating. Cantor Fitzgerald raised its target to $345, while Barclays and Morgan Stanley both set their targets at $300. Citi increased its target to $240, and UBS moved to $230. Other firms, including TD Cowen, Wells Fargo, and Clear Street, also adjusted their estimates higher. These moves reflect greater conviction in the company's trajectory across launch, connectivity, and AI sectors.

Shares of the company closed at $147.79 on October 20. By early premarket trading on October 21, the stock had jumped roughly 8 percent. The average analyst price target has moved higher, indicating a stronger belief in the long-term growth potential of the firm. However, the elevated spending levels remain a point of focus for investors as they digest the results and the newly elevated Street targets.