The market welcomed SpaceX's move into profitability, but Japanese stocks continued to trade with limited upside. The US market and domestic margin market showed mixed moves following the results, amid rapid growth in the AI division and rising Starlink subscriber numbers.
Following reports that SpaceX posted its first-ever profit in its results announcement during US trading hours, the Japanese market rose from the open. AI division revenue reached $7.6 billion, up 830% year on year, while data center contracts for its cloud business also expanded rapidly. Starlink subscribers exceeded 13.6 million, and the satellite internet business posted a 21.4% profit margin, highlighting the contribution from AI-related earnings.
In terms of the market reaction, the Nikkei Stock Average temporarily rose by more than ¥1,300, with buying back of AI-related stocks said to be the main driver. As of 16 October, the margin buying balance was ¥6.664 trillion and the margin selling balance was ¥666.7 billion, putting the margin balance ratio at approximately 10 times. Some reports also suggested that buying-back momentum was limited. CDS spreads related to SoftBank Group rose sharply, with some views that the news would cap gains in the company's share price.
After the results, SpaceX rose more than 9% in the US market in a gap-up move. Elon Musk disclosed the establishment of a special committee to consider the possibility of integrating management with Tesla, drawing attention to Tesla's results due later tonight. Market focus is also turning to upcoming results from Meta, Tesla, IBM, Texas Instruments and Lam Research.