Investor's Corner
Wall St’s reaction to Daimler’s reduced earnings guidance highlights critical eye on TSLA
German automaker Daimler AG had a pretty tough Monday. Following an announcement on Sunday that it is cutting its 2019 earnings guidance over the effects of an ongoing diesel emissions scandal at Mercedes-Benz, the company’s shares declined 3.6% in Frankfurt. The carmaker has noted that it is currently facing a “high three-digit million” euro increase in charges related to the diesel scandal, which would likely result in its 2019 earnings being about the same as 2018’s.
Daimler’s diesel troubles were highlighted on Friday, when Germany’s vehicle authority, the Federal Motor Transport Authority (KBA), issued a forced recall against the automaker for allegedly using an illegal shut-off device for the diesel-powered Mercedes-Benz GLK 220. The KBA is looking to extend its investigation into the carmaker further, as the cheating devices were reportedly used in Daimler’s OM642 and OM651 engines, which are equipped in popular vehicles such as the Mercedes-Benz C-Class and E-Class. The initial recall currently covers 60,000 units of the GLK, though the number could be as high as 700,000 vehicles if it covers other vehicles using the OM642 and OM651 engines, according to German publication Bild am Sonntag.
Apart from the KBA investigation in Germany, Daimler has noted in its first-quarter earnings release that it is facing an emissions probe by the US Justice Department. The company is also facing a consumer-class action lawsuit in the United States along with Bosch, one of its suppliers, for allegedly conspiring to deceive US regulators. These could prove to be a stumbling block for the company, particularly as it attempts to breach the premium electric vehicle market with the Mercedes-Benz EQC, which is expected to compete against EV veterans such as the Tesla Model X.
Amidst these recent headwinds, Wall St. analyst Dan Ives from Wedbush Securities noted in a statement to CNBC that Daimler currently needs to perform a “balancing act” as it attempts to weather these challenging times. “This really handcuffs them a bit. It’s going to be a balancing act, they really need to hold investor’s hands on this, and the question is ‘Can they navigate these headwinds?’ It’s an arms race in the electric vehicle world right now,” Ives said.
The Wedbush analyst’s reaction to the developments at Daimler is quite compelling. The automaker’s challenges today are serious, yet Ives’ comments were quite restrained. Considering that the automaker is facing another diesel emissions scandal and a “high three-digit million” euro increase in charges that will result in reduced 2019 profits, the circumstances might very well handcuff Daimler more than “a bit.” Ives’ tempered response to the German automaker’s update ultimately stands in stark contrast with his reactions to Tesla. Following Tesla’s Q1 earnings call, which revealed yet another loss for the company, Ives practically bordered on the subjective, seemingly mocking Musk’s continued optimism in future quarters.
“We view this quarter as one of (the) top debacles we have ever seen, while Musk & Co., in an episode out of the Twilight Zone, act as if demand and profitability will magically return to the Tesla story. As such, we no longer can look investors in the eye and recommend buying this stock at current levels until Tesla starts to take its medicine and focus on (the) reality around demand issues which is the core focus of investors” Ives wrote in a note to Wedbush’s clients.
Following a leaked email from Elon Musk urging employees to cut costs, Ives also issued a note describing the electric car maker’s circumstances as a “code red situation,” adding that Tesla faces a “Kilimanjaro-like uphill climb” as it attempts to hit its profitability targets this 2019. Quite interestingly, Ives’ comments likely helped push TSLA stock down over 4% then, which was more than Daimler’s drop on Monday. It should be noted that none of these dramatic tones were present in Ives’ comments about the German automaker’s recent updates. This is quite ironic considering his colorful reactions to Tesla’s developments were rooted only in speculations, while Daimler’s current headwinds are the result of an actual investigation by Germany’s Federal Motor Transport Authority (KBA).
During Tesla’s annual shareholder meeting, several TSLA shareholders brought up the issue of the negative narrative and misinformation surrounding the company. Elon Musk noted that these misconceptions are distressing, though he admitted that he is at a loss as to how to change the negative narrative surrounding Tesla. For the electric car maker, perhaps the best way to address all the skepticism is to simply hit its self-imposed, ambitious targets, such as delivering over 90,000 vehicles to customers this quarter, or reclaiming profitability in the second half of 2019.
Disclosure: I have no ownership in shares of Tesla or Daimler, and have no plans to initiate any positions within 72 hours.
SpaceX reported its third-quarter 2026 financial results on October 20, posting the company’s first solidly profitable quarter since going public earlier in the year under the ticker $SPCX.
Revenue reached $14.58 billion, up 161 percent year-over-year from $5.6 billion, and well ahead of consensus estimates in the $12.7 to $12.9 billion range. The results highlight a rapid shift in SpaceX’s center of gravity toward artificial intelligence/super intelligence, while Starlink and traditional space operations continue to show robust progress.
Here are the key financial results for the quarter:
- Revenue of $14.58 billion (+161% YoY)
- Adjusted EBITDA of $8.8 billion (+306% YoY)
- GAAP net income of $4.4 billion (versus a $1.1 billion net loss in the prior-year quarter)
- Adjusted EPS of approximately $0.35 (versus roughly $0.13–0.16 expected)
- Income from operations of $2.8 billion
The AI/SI segment generated $7.56 billion in revenue, an 830 percent year-over-year increase, making it the company’s largest segment for the first time. Growth was primarily driven by the activation of major cloud services agreements, the integration of Cursor (acquired earlier in 2026), and rising usage of Grok models and the newly introduced Grok Bot personal agent.
🚨 SpaceX just reported earnings! Here are some highlights:
Financial:
Revenue $14.58B (+161% YoY) vs. consensus ~$12.7–12.9B
Adjusted EBITDA $8.8B (+306% YoY)
GAAP net income $4.4B (vs. prior-year loss; first solidly profitable quarter post-IPO)
Adjusted EPS ~$0.35 vs. ~$0.13–0.16 expectedSegments:
Super Intelligence (SI, formerly AI): $7.56B (+830% YoY) — now the largest segment, driven by cloud contracts, Cursor, and Grok.
Connectivity (Starlink): $5.25B (+69% YoY).
Space: $1.77B.Other highlights:
Starlink subscribers: 13.6M (+89% YoY).
Nameplate compute: 1.7 GW.
Capex: $19.6B (majority AI infrastructure).
Cash & marketable securities: ~$90B.
First revenue-generating Starship mission (26 V3 Starlink satellites, ~10× Falcon 9 downlink capacity per launch).— TESLARATI (@Teslarati) October 20, 2026
SI adjusted EBITDA reached $5 billion, and nameplate compute capacity stood at 1.7 GW at quarter-end, up from 1.4 GW in June and 0.6 GW a year earlier. Capital expenditures totaled $19.6 billion, with the majority allocated to AI infrastructure, including continued expansion of the Colossus facilities.
The Connectivity segment, which primarily surrounds Starlink, produced $5.25 billion in revenue, a 69 percent year-over-year and 22 percent sequentially. These are pleasant results to see and expected, considering how many airlines have adopted Starlink over the past year.
Starlink consumer subscribers reached 13.6 million, an 89 percent increase from the prior year, and a sequential gain of 1.6 million. Consumer average revenue per user improved to $69. Meanwhile, Enterprise and Government revenue also grew strongly, and Starlink is now installed on more than 3,800 aircraft, making internet more accessible and better performing than previous options.
The Space segment also performed well and contributed $1.77 billion in revenue, up 6 percent year-over-year and 84 percent sequentially. A major milestone was the successful first revenue-generating Starship mission (Flight 14), which deployed 26 V3 Starlink satellites. Those satellites added roughly 10 times the downlink capacity of a typical Falcon 9 Starlink launch.
SpaceX completed 12 customer launches during the quarter, including NASA’s Nancy Grace Roman Space Telescope mission, and continued to grow its backlog of crewed, national security, and commercial flights.
CFO commentary noted that the combination of launch leadership, recurring Starlink revenue, and rapid SI expansion is producing meaningful operating leverage.
The company ended the quarter with roughly $90 billion in cash and marketable securities, providing substantial resources for ongoing investment while targeting an investment-grade balance sheet. Sequential revenue nearly doubled from the $7.81 billion reported in the second quarter, illustrating the pace of the AI-driven acceleration. Things are looking strong for SpaceX.
What’s incredibly striking is the fact that SI has grown to be larger than the rest of the company in such a short amount of time. CEO Elon Musk said on the earnings call that Grok Bot is the “fastest-growing product I’ve ever seen,” so it seems that it could be a true keystone of SpaceXSI over the next few years.
SpaceX (NASDAQ: SPCX) will report its second public earnings call today since its IPO earlier this year, and there are a few things we expect to hear about, as well as Wall Street analysts, who have already outlined their expectations for the call.
Wall Street analysts have a consensus of $12.72 billion in revenue and an earnings per share (EPS) of $0.13. These are broken down into three sectors: Space, Connectivity, and AI/SI, which are perceived in this way:
- Space: $1.41 billion
- Connectivity: $4.84 billion
- AI/SI: $6.47 billion
Other outlets cluster near $12.8 or $12.9 billion in revenue and $0.14 – $0.15 EPS. This implies a roughly 65 percent sequential growth from Q2’s $7.81 billion, driven mostly by AI/SI, with the first post-IPO positive EPS expected.
Here are the three things to watch for on the call:
AI Revenue Ramp and the $100B+ ARR target
AI is truly the swing factor for SpaceX, and analysts expect it to roughly double from Q2’s $2.56 billion and become about half of total revenue. Management previously guided to a $100 billion+ annualized run rate by December, including the Cursor acquisition, which was $60 billion, to close the quarter.
Listen for updates on SpaceX’s compute capacity, especially pertaining to its contracts with Google, Anthropic, and others, revenue per watt, any new deals, and Cursor’s early contribution.
Starlink/Connectivity Metrics and Mobile Expansion
Connectivity remains a main profit engine for SpaceX. Subscriber additions will be something to pay attention to, as Q2 ended at 12 million and previews are looking at 14 million for this quarter. Additionally, ARPU trends, enterprise and government growth, and any commentary on Starlink Mobile will be something to pay attention to, especially following the recent low-band spectrum deal and FCC-related constellation approvals.
Capex Trajectory, Cash Burn/FCF, and Starship/Operational Updates
Q2 capex of roughly $18.4 billion weighed on the stock. Investors will look to scrutinize Q3 spending levels, any guidance on the pace into Q4/2027, free cash flow, backlog, and liquidity. Operational color on Starship (Flight 14 milestones and Flight 15 timing/reusability progress), Falcon cadence, and government/NASA contracts are also in focus.
Of course, there will also be some speculation on the potential Tesla-SpaceX merger, but there was nothing mentioned in the company’s proxy it sent earlier this week.
SpaceX will report earnings after market close today and will stream the call on X.
Watch live as SpaceX discusses our Q3 2026 earnings at 3:30pm CT today → https://t.co/Qrb0qeVG15
— SpaceX (@SpaceX) October 20, 2026
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Elon Musk said he is planning to give “every one of his SpaceX shares to every kid in America” in 2027, stating that “this will be the first of many.”
SpaceX went public earlier this year, and its stock price has been relatively stable since leveling off shortly after its IPO. Based on its current price, it’s a gift of just over $10 billion to children across the United States.
It appears to be closely related to President Donald Trump’s bank accounts for children, which were set up earlier this year as Trump Accounts.
Just hours earlier, Anthropic had announced the establishment of its Anthropic Public Benefit Fund, “a new wholly-owned entity dedicated entirely to public benefit.” Musk responded by stating he recommended “giving the shares directly to the public,” and that he would be doing it that way.
Just a little bit later, Musk said children across the U.S. would be getting a share from him:
Next year, I will give one of my SpaceX shares to every kid in America.
This will be the first of many.
— Elon Musk (@elonmusk) October 19, 2026
There are roughly 70 million children, meaning someone under the age of 18, in the United States, according to the Federal Interagency Forum on Child and Family Statistics. Musk’s ownership of SpaceX stock shows he has around 849 million Class A shares of SpaceX stock, according to filings with the SEC.
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