SpaceX's strong quarterly results have reignited market confidence in the outlook for artificial intelligence investment, pushing US stock futures higher with technology shares leading the gains.
S&P 500 futures rose 0.2%, while Nasdaq 100 futures gained 0.7%. SpaceX climbed about 9% as its AI business revenue surged 830% year-over-year and became its largest revenue source for the first time, with net profit exceeding expectations by 2.3 times, lifting market sentiment. Meanwhile, Super Micro Computer released impressive preliminary quarterly results and rose about 15% pre-market, further reinforcing the market narrative of persistently strong AI demand.
However, the positive sentiment was somewhat tempered. Oil prices rose again, with Brent crude approaching $110 per barrel, as vessels near the Strait of Hormuz came under attack threatening supply, while US crude inventory data showed a drawdown of 4.9 million barrels. US Treasury yields and the dollar were little changed. Netflix fell about 6% pre-market after both its fourth-quarter revenue guidance and advertising revenue missed expectations, becoming the main drag of the day.
Stephan Kemper of BNP Paribas Wealth Management Germany said: "Investors are inherently bipolar in sentiment. The strong data and positive guidance demonstrated by SpaceX and Super Micro Computer are exactly the medicine the market needs right now."
S&P 500 futures rose 0.2%, Nasdaq 100 futures gained 0.7%. SpaceX rose about 9%, Super Micro Computer rose about 15%, Netflix fell about 6%
The euro declined 0.1% to $1.1224
The US 10-year Treasury yield was little changed at 5.11%
The German 10-year yield was little changed at 3.40%
Brent crude rose 0.9% to $109.72 per barrel
Spot gold fell 0.1% to $4,120.68 per ounce
SpaceX Earnings Ignite AI Trade
SpaceX reported third-quarter revenue of $14.58 billion, up 161% year-over-year, with AI business revenue surging 830% year-over-year, surpassing other businesses for the first time to become the company's largest single revenue source, while net profit exceeded market expectations by 2.3 times.
According to Bloomberg, Simon Wiersma, Chief Investment Strategist at ING, said: "SpaceX provided the answer the market was looking for — AI-related demand is still real. This not only boosted confidence in SpaceX itself but also improved sentiment toward the entire AI ecosystem."
Additionally, Elon Musk expressed support for a potential merger between SpaceX and Tesla, further driving SpaceX shares higher.
Anthropic's Hundred-Billion Compute Plan Helps Restore Market Confidence
SpaceX's better-than-expected financial results, combined with reports that Anthropic PBC plans to invest up to $750 billion in compute infrastructure over the coming years, together alleviated recent market concerns triggered by elevated valuations and financing pressures.
Stephan Kemper of BNP Paribas Wealth Management Germany said: "Investors are inherently bipolar in sentiment. The strong data and positive guidance demonstrated by SpaceX and Super Micro Computer are exactly the medicine the market needs right now."
The technology earnings season continues this week, with Meta Platforms and Tesla set to report after the close on Wednesday, as markets closely watch whether AI investments can continue to deliver returns.
Super Micro Computer's Preliminary Quarterly Results Beat Expectations, Netflix Guidance Weighs on Sentiment
Super Micro Computer released preliminary first-quarter results, with revenue exceeding analyst expectations by 27%, sending shares up about 15% pre-market and once again confirming robust demand for AI computing infrastructure.
In contrast to the strength in the technology hardware sector, Netflix fell about 6% pre-market. The company's fourth-quarter revenue guidance and advertising revenue both fell short of market expectations, weighing on sentiment in the streaming sector.
European and Asian Markets Show Divergent Performance
In European markets, the Stoxx 600 edged higher, with gains in energy and technology sectors offset by declines in consumer-related sectors. The Stoxx 50 opened up 0.3%, France's CAC 40 rose 0.1%, Germany's DAX was roughly flat, and the UK's FTSE 100 fell 0.1%. The yield premium of French 10-year government bonds over comparable German bonds widened to more than 155 basis points.
In Asian markets, regional equity benchmarks rebounded broadly, with South Korea's Kospi leading gains. South Korea's Elice Inc. rebounded 30% in a single day after experiencing one of the worst IPO debut performances in Korean history.
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