SpaceX and Tesla (TSLA.O), will report third-quarter results on consecutive days this week, giving investors a rare side-by-side look at Elon Musk’s two most valuable companies as merger speculation gathers momentum. The results will test whether Starlink’s steady growth and Tesla’s car profits can fund the AI spending powering the merger debate.
“In terms of metrics, it would have to be Starlink revenue growth more than launch counts and improvement in auto margins for Tesla,” said Shawn Campbell, an adviser at Camelthorn Investments who owns shares in both companies, describing investors’ focus for results. Barclays suggested last week a deal could be announced before Tesla’s annual meeting, with SpaceX the likelier acquirer, though neither company nor Musk has officially committed to favoring a deal.
Tesla on Monday said its annual meeting would be held on December 3.
In an all-stock deal, Barclays estimates Musk would hold about 37% of the equity and 56% of the votes. “A SpaceX acquisition of Tesla would be cleaner as it would make it easier to deal with the China business as an asset that is dealt with separately,” Campbell said.
Tesla gave the speculation a showpiece on Thursday, unveiling a new Roadster sports car, slated for production in 2028, that can jump and turn over mid-air using rocket technology at a SpaceX test site in Texas.
“Musk is blending the future of mobility together by integrating auto and rocket technology; at the very least it’s a subtle plant in investors’ minds making an engineering efficiency argument for a merger,” said Bill Birmingham, head of research at REX Financial.
He said the timing, ahead of Tesla’s annual shareholders meeting, was no coincidence. SpaceX absorbed Musk’s xAI in February, months before its June IPO, and spending by Tesla and SpaceX now points to the same place: AI.
The businesses still differ, with SpaceX earning from launches, Starlink and AI compute, and Tesla from cars and energy storage. SpaceX reports on Tuesday and Tesla on Wednesday after markets close. SpaceX reports only its second results as a public company, with investors watching whether its surging AI spending is turning into revenue.
The company is expected to report third-quarter revenue of about $12.74 billion and earnings of 14 cents a share, just four months after going public, according to data compiled by LSEG. That compares with second-quarter revenue of $7.8 billion, a net loss of $541 million, and AI capital spending of $15.8 billion.
Evercore ISI expects SpaceX to exit 2026 at an annualized revenue run-rate of about $104 billion, driven by the AI segment doing “most of the heavy lifting,” and estimates capital spending reaching about $151 billion in 2027.
Connectivity revenue, which includes Starlink, rose 66% to $4.3 billion in the second quarter.
SpaceX also agreed on October 8 to buy 800 MHz spectrum from Grain Management for about $8 billion, a deal that needs Federal Communications Commission approval and underpins its Starlink Mobile push. Shares closed at $146.03 on Friday, above the $135 IPO price but well below their post-debut peak. (Reuters)
