Key Points
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SpaceX had its first profitable quarter in Q3 2026, and its AI and connectivity segments delivered impressive revenue growth.
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It has substantial capex that could double next quarter.
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SpaceX stock trades at a premium, so much of its growth is already priced in.
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Space Exploration Technologies (NASDAQ: SPCX) released its Q3 2026 earnings results after the market closed on Tuesday, and it reported an impressive double beat. Revenue jumped 161% year over year to $14.6 billion, and net income swung to $4.4 billion from a $1.1 billion loss a year ago.
The highlights were great. Let’s dive deeper into the earnings report to see if SpaceX stock is worth buying right now.
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The AI business and Starlink are growing quickly
In terms of revenue, SpaceX’s AI segment, which it now calls super intelligence (SI), is its biggest business. SI revenue increased 830% year over year to $7.6 billion, accounting for 52% of the company’s total revenue.
That number should continue to increase as Alphabet‘s Google starts paying SpaceX $920 million per month for compute as of this month. SpaceX will also likely get more revenue from its Cursor acquisition. Cursor contributed $608 million of revenue in Q3, but the acquisition only closed on Aug. 14, so that total was for about six-and-a-half weeks.
Connectivity, SpaceX’s most profitable segment, also delivered impressive growth with revenue up 69% year over year to $5.2 billion and operating income up 99% to $2.4 billion. Starlink went from 12 million consumer subscribers at the end of Q2 to 13.6 million at the end of Q3.
Starlink’s average revenue per user (ARPU) also ticked up from $66 to $69. ARPU declined from 2025 as Starlink doubled its user base, so it’s a promising sign that the service is still growing and ARPU is ticking back up.
SpaceX is executing well across the board. The space business was roughly breakeven in Q3, but it supports Starlink, as SpaceX’s internal flights carry Starlink satellites, increasing network capacity. The company has a reliable profit engine in its connectivity segment and an AI segment with strong growth potential.
SpaceX is spending heavily, and its stock is expensive
The trade-off to SpaceX’s AI growth is that it requires significant capital expenditures. SI capex accounted for $16.4 billion of the company’s $19.6 billion in total capex in Q3. It’s currently spending more on SI capex than it earns in revenue. Management also expects capex to potentially double in Q4, providing guidance of $35 billion to $40 billion.
SpaceX’s valuation is also a concern. The company trades at about 67 times trailing sales as of Oct. 21. Even if you annualize its Q3 revenue, it would still be trading at about 37 times sales, far higher than most tech stocks. Such a high multiple means that much of SpaceX’s growth potential is already priced in, and this stock could get hit hard during a bear market.
Should you buy SpaceX?
While SpaceX has been highly volatile, the price has been in the $150 to $160 range recently, not far from the $150 at which it debuted on the day of its IPO. Strong earnings won’t necessarily be a huge needle mover because the stock is already so expensive.
I like SpaceX as a company, but I’ve felt from the beginning that it’s better to be patient and wait for more reasonable buying opportunities. You may want to consider adding it to your watch list for now, or starting with a small position that you can add to if the share price dips.
Should you buy stock in Space Exploration Technologies right now?
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Lyle Daly has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.
