SpaceX, Tesla earnings to test Musk's AI spending ambitions as merger talk grows

SpaceX reports on Tuesday and Tesla on Wednesday after markets close, giving investors a side-by-side look at the companies as merger speculation gathers momentum. Barclays suggested a deal could be announced before Tesla's December 3 annual meeting, with SpaceX the likelier acquirer; neither company nor Elon Musk has officially committed to favoring a deal. Barclays estimates Musk would hold about 37% of the equity and 56% of the votes in an all-stock deal.

Analysts expect SpaceX to report third-quarter revenue of about $12.74 billion and earnings of 14 cents a share, compared with second-quarter revenue of $7.8 billion, a net loss of $541 million and AI capital spending of $15.8 billion. Connectivity revenue, including Starlink, rose 66% to $4.3 billion in the second quarter. SpaceX also agreed on October 8 to buy 800 MHz of spectrum from Grain Management for about $8 billion, subject to Federal Communications Commission approval.

Analysts expect Tesla to report adjusted earnings of roughly 43 cents a share on revenue of about $27.88 billion, compared with 50 cents a year earlier. Tesla delivered 486,532 vehicles in the third quarter, beating estimates, but analysts expect negative free cash flow of $4.92 billion. Investors are also focused on robotaxis and the Optimus humanoid robot, while Tesla has said capital spending will exceed $25 billion this year.