SpaceX's AI sales jumped, and so did its spending plan. Tesla and SpaceX formed committees to weigh a merger. Brent climbed back above $110 as Tehran hardened its terms.
AI Sales Arrived After the Close. So Did a Bigger Bill.
Nasdaq 100 futures are up about 0.4%, and S&P 500 futures about 0.1%. AI results lifted Seoul, where the Kospi won back most of Tuesday's 3.7% loss.
On Tuesday the Dow rose about 1% and the S&P 500 about 0.3%, while the Nasdaq Composite was flat. The 30-year Treasury yield fell to 5.42%. Britain's inflation rate rose to 3.5% in September, led by motor fuel.
Tuesday evening's results showed AI revenue arriving at scale, with spending still running ahead.
Investor Signal
The long end is doing the work. The 30-year yield has fallen 19 basis points since Oct. 1 while the 2-year is up 1, a pattern that fits expectations of a Fed that tightens into a slowdown. Brent above $110 threatens that rally, since fuel is what keeps the inflation side alive. Wednesday’s 20-year bond auction is the next test of whether buyers still want duration at these yields.
Elon Musk's $2.1 Trillion Hit List
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SpaceX's AI Unit Passed Half Its Revenue. It Spent More Than Twice What It Brought In.
SpaceX (SPCX) reported third-quarter revenue of $14.58 billion, up 161% and about 15% above forecasts. Its Super Intelligence unit brought in $7.56 billion, about 52% of the total.
That unit accounted for $16.44 billion of capital spending, more than the company's total quarterly revenue. Finance chief Bret Johnsen guided fourth-quarter capital spending to $35 billion to $40 billion, roughly double the third quarter's $19.6 billion. He guided first-quarter 2027 revenue to $33 billion to $37 billion. Net financing inflows totaled $99.8 billion in the first nine months of the year.
The shares were indicated about 8% higher, a move that also reflects the merger news.
Super Micro Computer (SMCI) now estimates fiscal first-quarter revenue of $18.5 billion to $19.5 billion, against guidance of $14.5 billion to $15.5 billion. It estimates gross margin at 12.0% to 12.5%, above the 10.4% to 10.8% it had guided. At the midpoints, gross profit came in about 46% above the level its guidance implied. The figures are preliminary and unaudited. The shares were indicated about 12% higher at 6:43 a.m.
Investor Signal
The gap between AI sales and AI spending has to be funded by someone. Super Micro sells into the build-out at a gross margin near 12%. Builders like SpaceX pay for it, and SpaceX’s AI unit spent more than twice what it brought in last quarter. Its first-quarter revenue guide runs well above third-quarter sales, so the question is whether revenue closes the gap or the spending plan leans harder on outside money. Net financing inflows of $99.8 billion in nine months say which has carried it so far.
Tesla and SpaceX Formed Committees to Weigh a Merger. A Bet on a Deal This Year Is Back Near 20 Cents.
Elon Musk said on SpaceX's earnings call Tuesday that SpaceX and Tesla (TSLA) have each formed a special committee of independent directors to discuss a combination. He said he is excluded from their talks as a conflicted party.
He said the committees "have not reached agreement on the terms of any transaction." Tesla approval would need a majority of all outstanding shares, which he called "quite a high hurdle." Musk cited shared work on AI software, robotics and a chip project called Terafab.
On Polymarket, the contract on a merger announcement by Dec. 31, 2026, was at 18.5 cents before the first reports. It rose to 22 cents overnight and was back near 19 cents pre-market. The contract for an announcement by the end of 2027 peaked above 70 cents and was at 68 cents early Wednesday.
Investor Signal
No terms exist, so the exchange ratio that decides who gains is still blank. That is what Tesla holders would eventually vote on, under a threshold Musk himself called a high hurdle. A combined company would also carry SpaceX’s AI spending plan. The bet on a deal this year trades in a thin market, and its overnight rise on no fresh news had faded by morning. Tesla’s results call after Wednesday’s close is the next chance to hear more.
Hidden in Tesla's Filing: A $12 Billion "Super Startup"
Pull up Tesla's most recent SEC filing. Page 5.
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This new "super startup" has nothing to do with cars or robots or space or AI…
But it sits at the center of what Blackstone calls "a $23 trillion investment opportunity."
And on Oct 21st, Elon is expected to pull back the curtain and reveal exactly what he's building.
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Brent Was Back Above $110. United Had Already Built Costly Fuel Into Its Outlook.
Brent crude touched $111.99 on Tuesday, a five-month high, then settled at $108.79 as Pakistan's army chief met Iran's leaders. Iranian media reported that Iran told him there would be no talks with Washington until its demands are met. Brent was back at $110.73 at 6:43 a.m.
Polymarket's contract on a U.S. announcement ending the Iran blockade by Oct. 31 fell to 8.5 cents by 4:46 a.m., from 10.5 cents Tuesday afternoon. The year-end contract slipped to about 36 cents from 39.
United Airlines (UAL) guided fourth-quarter adjusted earnings to 50 cents to $1.50 a share. The LSEG consensus was $1.76. United assumes jet fuel at $4.80 a gallon, about 45 cents above analysts' assumption. The company puts that gap at about $1 a share. Third-quarter revenue rose 17.4% to a record $17.9 billion on capacity growth of 1.3%.
Investor Signal
United’s own estimate points at fuel rather than demand. The company puts the gap between its $4.80 jet fuel assumption and analysts’ at about $1 a share, which covers most of the distance to the $1.76 consensus. Revenue rose 17.4% to a record on 1.3% capacity growth, so demand is not the constraint. Traders are pricing out an end to the blockade this month faster than one by year-end, so the fuel assumption has not loosened.
Netflix Beat Its Own Margin Plan. Its Ad Revenue Forecast Fell 10%.
Netflix (NFLX) earned 87 cents a share in the third quarter, above the 82 cents it had forecast. Its operating margin was 34.6%, against its own 33.2% forecast, mainly because of the timing of expenses.
Netflix now expects 2026 ad revenue of about $2.7 billion, down from about $3 billion, citing a slower rollout of some ad products. Its fourth-quarter revenue guide of $13.44 billion came in a little below expectations. Revenue growth has slowed each quarter this year, to 11.8% from 16.2% in the first quarter. The shares were indicated about 7% lower at 8:06 a.m.
Investor Signal
Price increases are doing much of the work. Netflix said subscription revenue is running ahead of plan, while revenue growth has slowed each quarter this year to 11.8% from 16.2%. Ad revenue, its next growth engine, is now guided about 10% below the earlier figure, and the ad tier’s expansion to 15 new countries starts in March 2027. Netflix bought back $4.8 billion of stock last quarter, about 1.7 times its free cash flow. Signs that viewing hours are growing again would ease the slowdown concern.
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An Australian Credit Fund Shut Its Doors. Getty Is Going Private Through Bankruptcy.
MA Financial suspended all applications and redemptions in its MA Secured Loan Series, a real estate credit fund. It cited slower loan repayments in a weakening home market. In August the fund had capped withdrawals at 1% of assets a month. The halt is reported to run until at least March 31, 2027.
Real estate credit is about 15% of the group's A$15.7 billion of assets under management.
Getty Images (GETY) began a prepackaged Chapter 11 case in Delaware on Wednesday. The Getty family and Koch Equity Development would invest up to $533 million and own all of the reorganized company. Common shareholders are set to receive nothing. Holders of $270 million of unsecured notes are to get about $170.2 million in cash.
Investor Signal
Investors carry the cost when cash arrives late. MA Financial’s gate went from 1% of assets a month to fully shut in about two months, and the halt runs into 2027. At Getty, common holders lose everything and unsecured noteholders take $170.2 million in cash on $270 million of notes. Neither is a loss on the underlying so much as a failure of timing. A second Australian manager freezing redemptions would show the strain spreading.
AI revenue is now arriving in size. SpaceX spent more on its AI unit than that unit brought in, and outside capital has funded the build-out.
The credit stories show what happens when cash arrives later than promised. Fund investors wait, and shareholders can be left with nothing. Costlier fuel squeezes the same timelines, as United's outlook shows. Tesla's call tonight may show how a combined company would fund its plans.
Rates Just Reset. Who Feels It First?
On January 2, the 10-year yielded 4.19%. By September 30, 5.29% — most of it in one quarter.
Some companies earn from higher rates. Some pay. Each runs on a different clock.
We traced three: IBKR, WRB and FIS. One has already reported. The other two report next, and the report tells you the exact line to check.
Free report, texted to your phone.