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Hello, I'm Leonie Kidd, and here is today's Morning Squawk.
Today, the most talked-about market news revolves almost entirely around one person—Elon Musk.
From the potential super-merger between SpaceX and Tesla, to SpaceX’s impressive performance, to Tesla’s upcoming earnings report, and the debates surrounding Starlink, he has dominated nearly every headline.
Currently happening: Rushing to the moon
Before-market trading saw SpaceX's stock surge after Elon Musk disclosed the establishment of a special committee to consider merging the rocket company SpaceX with Tesla. Musk called the idea “a good one.”
Musk also stated that he is a "party with a conflict of interest," meaning he will not participate in related discussions.
If realized, this would be the largest merger in history, creating a giant company with a market capitalization of approximately $3.5 trillion. Tesla's stock also rose during early trading.
Why is it receiving attention?
The existing joint venture between the two companies, Terafab, plans to test its first SRAM chip before June next year, aiming to achieve one terawatt of computing power annually. Musk said that a full merger means there is “a lot to gain” in jointly developing superintelligent software.
Bullish view
Deepwater’s Gene Munster told CNBC that if shareholder approval is ultimately required, the deal will “easily pass” and will create “the most unique company in the world” in every respect.
Bearish view
Terafab's aggressive timeline depends on securing complex equipment from suppliers such as ASML, Applied Materials, and KLA.
Don't forget these numbers
In addition to the merger news, SpaceX reported strong earnings, with third-quarter revenue up 161% year-over-year, significantly exceeding expectations. However, Julie Zhu of MoffettNathanson cautioned that the company will face “substantial capital expenditure requirements” in the coming years.
Significant volatility: Netflix gets no respite
Even though profits exceeded expectations, they were not enough to excite Netflix investors, and the stock continued to decline in pre-market trading. Here are the figures:
- Earnings per share: $0.87, expected $0.82
- Revenue: $12.87 billion, expected at $12.87 billion
- Full-year outlook: Revenue forecast lowered to $51.1 billion, at the lower end of the range.
- Analysis: Investors and analysts commonly attribute Netflix's underperformance to a lack of breakout content. Rich Greenfield of LightShed said that vague guidance has eroded investor confidence in the stock.
- Industry insight: Kevin Mayer, former Disney executive and co-CEO of Candle Media, told CNBC that Netflix "has hit a wall," but he noted that not all responsibility can be placed on outgoing executive Bela Bajaria, adding that her successor, Peter Rice, is a strong candidate.
European markets experienced significant volatility
EssilorLuxottica led the Stoxx 600 in Europe, driven by revenue guidance that exceeded expectations, despite a slowdown in smart glasses sales. Carrefour was the worst performer in European markets after announcing that civil unrest in France would impact its supermarket group’s profits this year. Meanwhile, sportswear giant Adidas raised its profit guidance, boosting its stock price in Frankfurt.
Earnings reports coming up: Meta and Tesla
After today’s market close, there will be several announcements—Meta and Tesla will both release their earnings after hours.
Social dilemma
After the September release of the AI agent Muse, analysts have expressed an optimistic outlook on Meta’s overall earnings report. Since that release, the stock has risen 15%.
- However, note that Bespoke’s data shows Meta has an 88% probability of surpassing expectations, yet its stock dropped nearly 8% after last quarter’s revenue missed estimates. Its stock also experienced significant declines following the earnings releases for Q1 2026 and Q3 2025.
On the Road: Roadster Stalls
For automotive stocks, this quarter has been challenging, which may weigh on Tesla. Deliveries declined 2% year-over-year but still exceeded expectations.
- However, note that according to Bespoke data, Tesla failed to meet analysts’ earnings per share expectations in two of the past four quarters, and the probability of its revenue exceeding expectations is only 58%.
In Progress: Developments Surrounding Starlink
According to The Wall Street Journal, citing U.S. officials and people close to the matter, Elon Musk ordered a slowdown of a version of Starlink used by Ukraine in its war against Russia.
The report emerges amid conflicting claims about whether Musk decided to slow down Starlink services to Kyiv. Previously, Musk stated on X that this decision was made by the U.S. military—and ultimately the president.
CNBC will interview Republican Senator John Cornyn from Texas at 8:40 AM to discuss this decision. Previously, he stated, "Helping Putin succeed in Ukraine is reckless."
Exclusive: Nebius says "Trump is right"
U.S. President Donald Trump urged data center companies on Wednesday to "reach agreements" with local communities to ensure their support for these costly facilities.
Trump stated that to make these facilities more popular, data center operators should pay "dividends" to communities "and/or individuals within the community."
Nebius is one of the neocloud companies affected by the recent sell-off, and it told CNBC that Trump’s idea is “not crazy,” as it could reward communities supporting AI development.
Finally...
One of OpenAI's most powerful AI models shut off its own safety monitoring while performing a task—and one of them even lied about it.
In a blog post late Tuesday, OpenAI stated that an agent powered by GPT-Sol 6.1 disabled automatic alerts sent to OpenAI’s security team while performing routine tasks. Another agent, powered by GPT-6 Astra and responsible for migration procedures, removed its monitoring integration and then falsely claimed it had not done so. These incidents occurred during internal coding tasks.
The Daily Dividend
—— Caleigh Keating, April Roach, Kevin Breuninger, and Kai N. Schwarz of CNBC contributed to this report.
This issue was edited by John Melloy.