SpaceX First Profit Puts Tesla Merger Talks in the Spotlight
SpaceX has reported its first profit as a public company, a major step for the space and technology firm led by Elon Musk. The company earned $4.4 billion in the third quarter of 2026, which covered the three months through September. This result marked a sharp change from the same period last year, when SpaceX reported a loss of $1.1 billion.
The company also reported revenue of $14.6 billion, a rise of 161% from a year earlier. Revenue means the total money a company earns from the sale of its products and services before it pays its costs. The latest figures beat Wall Street forecasts and showed that SpaceX has grown far beyond its early role as a rocket maker.
The results came at a time when investors were also focused on a possible merger between SpaceX and Tesla, Musk’s electric car company. Musk said there was a strong case for the two firms to join, but he made it clear that no final deal had been reached. Both firms have set up special committees of independent directors to study the idea.
The news has raised fresh questions about the future of Musk’s business empire. SpaceX works on rockets, satellite internet and artificial intelligence (AI), while Tesla makes electric cars and develops self-drive systems and robots. A merger could bring these areas under one company, but it would also face major financial, legal and shareholder hurdles.
Revenue Rises as AI and Starlink Drive Growth
SpaceX’s latest results show how much its business has changed. For years, the company was best known for its rockets and its work on space travel. It now has several major sources of income, with AI and its Starlink satellite internet service at the heart of its growth.
The AI unit, which the company calls Super Intelligence, earned about $7.6 billion in the third quarter. That made it SpaceX’s largest source of revenue for the period. The result shows the fast rise of AI as a key part of the company’s business.
Starlink remains the firm’s largest source of profit. It uses a large network of satellites to provide internet access to homes, firms, ships and other users. The service has become a key part of SpaceX’s business because it can earn money from customers on a regular basis, unlike some rocket projects that depend on large contracts or specific launch dates.
The two units serve different needs. Starlink offers internet access across many parts of the world, while the AI unit provides computing tools and related services. Together, they have helped SpaceX earn more money and attract greater interest from investors.
SpaceX reported revenue of about $14.6 billion, above analyst forecasts of $12.72 billion. Its profit of $4.4 billion also beat market expectations. After the report, SpaceX shares rose in after-hours trade, while Tesla shares also moved higher as investors weighed the possible merger.
Elon Musk Says a Tesla Merger Has Merit
The company’s strong results were not the only major news. Musk also spoke about a possible merger between SpaceX and Tesla during a call with analysts. He said there was a clear case for the two firms to join, as both were focused on AI, robots and major technology projects.
Yet Musk warned that a deal was far from certain. Both firms have set up special committees made up of independent directors to discuss the proposal. These groups must study the terms and decide whether a merger would serve the interests of their shareholders.
Musk said he could not take part in the committees’ talks because he had a conflict of interest. He leads both firms and has a major stake in each one. His role would make it hard for him to act as a neutral party in a deal that could change the value and control of his own assets.
The merger would also need approval from Tesla shareholders. Musk has said that at least 50% of Tesla shareholders would need to approve the deal. That vote is a major hurdle, as some investors may prefer Tesla to remain a separate company.
For now, there are no final terms. The two committees must assess the value of each firm, the form of any share exchange and the effect on current shareholders. They must also consider how the deal could affect staff, customers and future plans.
Why SpaceX and Tesla Could Benefit From a Merger
SpaceX and Tesla may seem like very different firms at first. One builds rockets and satellite systems, while the other makes electric cars and works on robots. Yet both firms rely on advanced software, AI, large-scale production and costly research.
A merger could help them share some costs and resources. Tesla’s work on self-drive technology and robots could have links to SpaceX’s AI work. SpaceX could also offer access to its satellite network and other systems that may help Tesla develop new products and services.
Both firms also have major plans that need large sums of money. SpaceX must pay for rocket tests, new spacecraft, AI systems and satellite networks. Tesla must spend on new cars, batteries, robots and self-drive technology. A larger combined company might have more ways to fund these projects.
The two firms are also part of a shared chip project called Terafab. Advanced chips are vital for AI, self-drive systems and robots. A joint approach to chip design and production could help them meet some of their future needs.
Still, these possible benefits do not guarantee success. A merger could make the company harder to manage. It could also create concerns about how money is shared between the space, car and AI units. Investors may ask whether each business would receive enough funds to meet its own goals.
A Deal That Could Give Musk More Control
The possible merger has also raised questions about control of the new company. Musk holds about 85% of the voting power at SpaceX but about 20% of Tesla. A deal could change his share of control over the combined firm.
Reuters reported that his control could rise to around 57% to 58%, based on possible share exchange terms. The final figure would depend on the structure and value of the deal. No final terms have been agreed, so this remains an estimate rather than a confirmed outcome.
For some investors, greater control could help Musk make long-term plans without delays. For others, it may raise concerns about the power of one person over a very large firm. They may also ask how the board would protect the interests of small shareholders.
Independent directors have a key role in this process. They must review the deal on its merits and decide whether the terms are fair. Their work is especially important because Musk has a direct interest in both companies.
Regulators may also examine the proposal. A merger between two major firms with links to AI, cars, space services and government contracts could attract close attention. Authorities may review the effects on competition, public contracts and corporate control.
SpaceX Plans Huge Spending on AI and Space Projects
Despite its strong profit, SpaceX faces very high costs. The company said capital spending reached $19.6 billion in the third quarter, almost three times the level from a year earlier. Capital spending refers to money used for long-term assets and major projects, such as factories, equipment, satellites and spacecraft.
SpaceX also expects its capital spending to rise to between $35 billion and $40 billion in the current quarter. That is a very large sum, even for a firm with fast revenue growth. It shows how much money the company plans to put into AI, satellite systems and new rocket technology.
The company must balance these costs with its need to earn steady profits. A strong quarter does not mean that every future quarter will deliver the same result. Large projects can face delays, test failures and cost rises. AI also requires vast computing power, which can add to the cost of data centres and chips.
Some investors have raised concerns about the amount SpaceX spends to compete with other technology firms. A merger with Tesla could offer new ways to share resources, but it could also add more pressure on the combined company to meet its financial goals.
Starship Remains a Major Part of SpaceX’s Plans
SpaceX is also focused on Starship, its large rocket system for future space missions. Musk said the company plans to attempt a key test on the next launch, due in November. The goal is to use mechanical arms at the launch site to catch both the rocket booster and the spacecraft as they return.
If the test succeeds, it would mark a major step toward full reuse of the system. Reusable rockets can cut the cost of space travel because firms can use the same hardware more than once rather than build a new rocket for every flight.
SpaceX hopes to make Starship ready for more regular launches. The system is part of the wider plan for future lunar missions with NASA. These missions could require large amounts of cargo, fuel and equipment to reach the Moon.
Yet Starship still faces major technical challenges. A successful test would not mean that the whole system is ready for routine use. SpaceX must prove that the rocket can fly safely, return to Earth and operate again with little repair.
What the News Means for Investors
The latest results give investors a reason to look more closely at SpaceX. Its strong revenue growth and $4.4 billion profit show that the company has become a major force in space services and AI. The role of Starlink also gives it a source of regular income that many space firms do not have.
At the same time, high capital costs and plans for further growth create risks. Investors must decide whether future revenue can support the company’s large spending plans. The outcome of the Tesla merger talks may also affect how they value both firms.
SpaceX shares rose after the results, while Tesla shares gained as news of the possible deal drew attention. However, share prices can change quickly as new details emerge. A rise after one report does not prove that a merger will happen or that it would benefit every shareholder.
Tesla was due to report its own third-quarter results on Wednesday, October 21. Those figures could give investors a clearer view of the carmaker’s financial health and its ability to fund future projects.
Conclusion: Strong Results, but No Merger Deal Yet
SpaceX’s first profit as a public company marks a major moment for Elon Musk’s business empire. The firm earned $4.4 billion on revenue of $14.6 billion in the third quarter of 2026. Revenue rose 161% from a year earlier, with AI and Starlink as major sources of growth.
At the same time, talks about a possible merger with Tesla have added a new layer to the story. Musk sees value in a combined firm, but independent committees must review the idea, and Tesla shareholders must approve any deal. Regulatory checks may also play a role.
For now, the merger remains a proposal, not a final agreement. SpaceX must also manage its large costs as it pursues AI, satellite internet and reusable rockets. The coming months may show whether the two firms can turn the idea into a deal and whether a combined company would deliver lasting value to shareholders.
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