Space Exploration Technologies Corp., known as SpaceX, gained 7.3% in Wednesday premarket trading after third-quarter results showed that SpaceX's AI business had become profitable. Semiconductor, server and memory shares followed SpaceX higher across markets from Seoul to New York. Calculations using TradingView data show that 26 major U.S.-listed AI hardware stocks lost approximately $1.6 trillion in combined market capitalization over the past month. Wednesday's premarket recovery restored about $274 billion, approximately 17% of that loss.
SpaceX's third-quarter revenue increased 161% from a year earlier to $14.6 billion, exceeding expectations of $12.7 billion. SpaceX's superintelligence segment includes a cloud operation that rents AI computing capacity to customers including Anthropic. The segment's revenue almost tripled to $7.56 billion. The segment generated $431 million in operating profit, reversing a second-quarter operating loss of $1.26 billion. CEO Elon Musk said on the earnings call, "We could rent out our compute several times over if we said yes to everyone". Chief Financial Officer Bret Johnsen said new data centers recover construction costs in under a year at current prices. The preceding selloff reflected concern that AI investment would never generate sufficient returns.
The PHLX Semiconductor Index ended Tuesday 14.6% below the index's October 6 closing level. The iShares Semiconductor ETF, SOXX, gained 1.6% in premarket trading. Super Micro Computer climbed 11.2% in premarket trading after an encouraging sales forecast and margins that exceeded expectations. Super Micro Computer would record the stock's largest daily increase since August 12 if the gain holds. Dell Technologies gained 5.1%. Hewlett Packard Enterprise advanced 4.4%. Vertiv Holdings increased 5.1%. Amkor Technology rose 8.2% after Nvidia announced that Amkor would increase advanced packaging capacity. Nvidia said Amkor would expand that capacity by more than 300% by the end of 2028.
South Korea's KOSPI advanced 3.3% on Wednesday. SK Hynix increased 5.8%. Samsung Electronics gained 5.7%. Trade Nation senior market analyst David Morrison said in a note that the indicators suggested traders were ready to purchase shares following price declines again.
The semiconductor index ended a run of eight consecutive declining sessions on Monday. LPL Financial's Adam Turnquist found only 16 instances since 1994 when the index declined for at least seven consecutive sessions. Turnquist found that gains over the subsequent three months averaged 9.5%. Turnquist cautioned that the historical pattern alone does not establish that the danger has passed.
CoreWeave would require an increase of about 40% to reverse the stock's one-month decline. Intel would require an increase of about 31% to reverse the stock's one-month decline. SpaceX remained about 21% below the stock's record closing price of $201.80 on June 16, despite the premarket advance.
Meta Platforms reports earnings after the market closes, with expectations of $6.54 per share and revenue of $63.34 billion. Tesla is expected to report earnings of 45 cents per share and revenue of $28.06 billion. SpaceX's results demonstrated that renting AI computing capacity can be profitable. Meta must demonstrate that constructing AI capacity can also generate returns.
SpaceX AI Segment Turns Profitable, Boosts Chip Stocks
BenzingaShare
Summary
SpaceX's AI segment turned profitable in Q3, with revenue rising 161% to $14.6 billion. The superintelligence division, including AI computing rentals, nearly tripled to $7.56 billion and posted $431 million in profit. The news boosted global chip and server stocks, with premarket gains recovering $274 billion of recent losses. Altcoins to watch may see renewed interest as the fear and greed index shifts with hardware demand.
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