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The tech-heavy Nasdaq Composite climbed 0.7% on Wednesday as SpaceX's (SPCX) blockbuster quarterly results reignited enthusiasm for the artificial intelligence trade, lifting semiconductor stocks along with the broader market.
The Elon Musk mash-up of satellites, social media and AI opened 10% higher after the rocket and technology company posted better-than-expected third-quarter results, driven by growth in AI infrastructure and cloud services.
The Philadelphia Semiconductor Index (SOX), which tracks the world's largest chipmakers, rose 0.96% to 11,392.25.
Ahead of the bell
Nasdaq 100 futures climbed 0.5% on Wednesday as SpaceX's (SPCX) blowout quarterly results rekindled enthusiasm for the artificial intelligence trade.
Contracts for the S&P 500 gained 0.3%, while Dow futures were broadly flat.
SpaceX shares surged as much as 8% in premarket trading after the rocket and technology company reported third-quarter revenue of $14.6 billion, beating expectations across the board.
The headline number masked a more significant shift: SpaceX's AI division, recently rebranded as "Super Intelligence," generated $7.6 billion in the quarter, overtaking both Starlink and the company's core rocket business combined.
AI boost
A year ago, AI accounted for around 15% of SpaceX's sales; by the time the company made its public markets debut, that figure had risen to a third; it now represents the majority of revenue.
The company attributed the AI surge to cloud services agreements, its acquisition of Cursor, and expanding demand for its Grok Bot and other software applications, adding $6.7 billion in incremental year-on-year revenue from those sources alone.
Chief executive Elon Musk also raised eyebrows on the earnings call by endorsing the idea of merging SpaceX with Tesla (TSLA), the electric carmaker, saying both companies had formed special committees to explore a potential deal.
Tesla is due to report its own third-quarter results after the market close on Wednesday, alongside social media group Meta (META), marking the unofficial start of Big Tech's earnings season.
Not all the news was positive for tech investors
Netflix (NFLX), the streaming giant, saw its shares fall sharply in premarket trading after it issued a fourth-quarter revenue forecast that missed analyst estimates and cut its 2026 advertising revenue guidance.
Oil markets added to the cautious undertone, with Brent crude futures rising to $110 a barrel and West Texas Intermediate trading near $100 a barrel.
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