Elon Musk’s SpaceX and Tesla are due to release their third-quarter results on Tuesday and Wednesday, respectively, giving investors an opportunity to assess the financial performance of both companies as speculation about a potential merger intensifies.
The results will show whether SpaceX’s expanding Starlink business and Tesla’s automotive earnings can support the enormous investments in artificial intelligence that have fuelled discussions about bringing the two companies together.
Investors are expected to focus on Starlink’s revenue growth and improvements in Tesla’s automotive margins, according to Shawn Campbell, an adviser at Camelthorn Investments who holds shares in both companies.
Barclays suggested last week that a merger agreement could be announced before Tesla’s annual shareholders’ meeting, scheduled for December 3. The bank identified SpaceX as the more likely buyer, although neither company nor Musk has officially indicated a preference for such a deal.
Under an all-stock transaction, Barclays estimates Musk would control approximately 37 per cent of the combined company’s equity and 56 per cent of its voting rights.
Campbell said a SpaceX acquisition of Tesla could make it easier to manage Tesla’s Chinese operations separately from the wider business.
Tesla added to the merger speculation on Thursday by unveiling a new Roadster sports car at a SpaceX test site in Texas. The vehicle, scheduled to enter production in 2028, is designed to jump and turn in mid-air using rocket technology.
Bill Birmingham, head of research at REX Financial, said the unveiling could encourage investors to consider how integrating automotive and rocket engineering might improve efficiency across Musk’s businesses.
He also suggested the timing, ahead of Tesla’s annual meeting, was significant.
SpaceX absorbed Musk’s artificial intelligence company, xAI, in February, months before its June initial public offering. Both SpaceX and Tesla are now directing substantial resources towards AI, although their revenue sources remain different. SpaceX earns from rocket launches, Starlink connectivity and AI computing, while Tesla relies primarily on vehicle sales and energy storage.
SpaceX will publish its results on Tuesday, followed by Tesla on Wednesday, both after the market closes.
For SpaceX, investors will be watching whether its rapidly increasing AI expenditure is translating into revenue. The company is expected to report third-quarter revenue of about $12.74 billion and earnings of 14 cents per share, according to LSEG data.
Those projections compare with second-quarter revenue of $7.8 billion, a net loss of $541 million and AI capital expenditure of $15.8 billion.
Evercore ISI expects SpaceX to end 2026 with an annualised revenue run-rate of approximately $104 billion, with its AI business expected to account for much of the growth. The firm also estimates that capital spending could reach about $151 billion in 2027.
Connectivity revenue, including Starlink, increased by 66 per cent to $4.3 billion in the second quarter.
SpaceX also agreed on October 8 to acquire 800 megahertz of spectrum from Grain Management for approximately $8 billion. The transaction requires approval from the Federal Communications Commission and is intended to support the expansion of Starlink Mobile.
SpaceX shares closed at $146.03 on Friday, above their $135 initial public offering price but below their post-listing peak.
Tesla, meanwhile, is on course to increase annual vehicle deliveries for the first time since 2023. However, investors are paying closer attention to profit margins and the company’s investments in robotaxis and humanoid robots.
Analysts expect Tesla to report adjusted earnings of about 43 cents per share on revenue of approximately $27.88 billion, compared with earnings of 50 cents per share a year earlier.
The company’s second-quarter profit fell significantly short of expectations, while free cash flow turned negative at $1.1 billion, marking its first deficit in more than two years.
Tesla nevertheless delivered 486,532 vehicles in the third quarter, exceeding analysts’ estimates.
The company has said its capital expenditure will exceed $25 billion this year. Its shares have fallen about 17 per cent in 2026, while analysts expect free cash flow to remain negative at $4.92 billion in the third quarter.
Despite those pressures, investors have continued to focus on Tesla’s long-term plans for robotaxis and its Optimus humanoid robot. These potential businesses are viewed as possible sources of higher-margin revenue that could eventually become more significant than traditional vehicle sales.
Tesla’s robotaxi operations and fleet remain small compared with Waymo’s, but the company expects to expand its self-driving taxi services in the coming years.
Much of Tesla’s valuation has been driven by these future ambitions, even as vehicle sales continue to account for the largest share of its revenue.
Ojo Triumph
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