SpaceX’s Super-Sized AI Capacity Plans: 8 Key Items Shaping the Stock Market Wednesday

These are the early headlines and other items poised to influence the market at the start of trading Wednesday. As we share this collection of market drivers, U.S. equity futures point to a mixed market open.

1. Iran told Pakistan’s army chief on Tuesday that there would be no talks with Washington until Tehran’s demands were met, Iranian media reported, underscoring its hardening stance despite mediation efforts by key interlocutor Pakistan. (Reuters) Benjamin Netanyahu is pushing to resume large-scale strikes against Iran and had instructed his military to plan for a major new offensive earlier this month, moves that risk plunging the region back into full-scale war… The mission ultimately did not go ahead, with the people familiar citing President Donald Trump’s opposition to restarting the conflict before the US midterm elections on November 3. (FT)

This is pushing oil prices up this morning, while oil inventories in the U.S. continue to fall strongly suggesting a growing supply imbalance that will keep oil, gas and related prices higher. The American Petroleum Institute (API) estimated that crude oil inventories in the United States fell by 4.93 million barrels for the week ending October 16. The week prior, U.S. crude oil inventories fell by what the API called a “staggering” 11.12 million barrels.

2. United Airlines on Tuesday forecast fourth-quarter profit well below Wall Street ‌estimates despite expectations for record revenue, as soaring fuel costs were expected to persist, eating into gains from strong travel demand and higher ticket prices. Airline fares are rising sharply, but fuel costs are climbing even faster, squeezing profits industry wide. (Reuters) Alaska Air Group on Tuesday forecast a bigger-than-expected fourth-quarter loss as soaring fuel costs continued to ⁠squeeze its profits despite strong travel demand and higher fares. (Reuters)

That weaker-than-expected guidance from United Airlines (UAL) and Alaska Air (ALK) crystalizes the energy input cost concern that we’ve been talking about the last few months. It also showcases the risk to consensus EPS figures not only for companies with high input exposure to petroleum-related products, but also the S&P 500. With that on our radar, we’ve been careful to pick our spots with the Pro Portfolio.

3. SpaceX and Tesla are studying a deal to unite Elon Musk’s two public companies in a multitrillion-dollar combination that would be the largest merger of all time. The world’s richest person on Tuesday said both companies had formed special committees to study a tie-up. It marks the biggest step towards a merger that would create a sprawling conglomerate oriented around AI and potentially worth more than $3tn. (FT) Musk made big promises for where the data-center business is going. By the end of next year, he said the company could run around 13 gigawatts of computing power, while adding the number could rise to 23 gigawatts if everything goes right. The company hit 1.7 gigawatts in operation in the third quarter. Next quarter, the company expects to nearly double its capital expenditures, Chief Financial Officer Bret Johnsen said… The number of Starlink consumer subscribers rose to 13.6 million as of Sept. 30, up from 12 million three months prior. Citing recently acquired spectrum, executives said SpaceX aspires to become a major mobile phone service provider in the U.S. (WSJ)

Much to unpack from this! Elon Musk’s admission that there is an exploration of merging SpaceX (SPCX) and Tesla (TSLA) is hardly a surprise given market chatter but also Musk’s past moves that pieced together his other entities. However, Musk’s admission suggests the potential for big M&A fees in 2027. Also in what we’ll call the “no-surprise camp” was the comment that SpaceX plans to challenge AT&T (T), Verizon (VZ) and other mobile carriers in the U.S.

Probably the most revealing is the robust ramp in SpaceX’s Super Intelligence (the new name for its AI business) capacity. That, along with the comment below from Super Micro Computer (SMCI), is likely to renew investor interest in AI infrastructure companies. The comment that SpaceX’s Q4 2026 capital spending plan is $35 billion-$40 billion, compared to the $19.6 billion spent in Q3 2026 is understandably going to get quite a bit of attention as it targets bringing on another 10 gigawatts of compute by the end of next year, up from the 2.5-3 gigawatts targeted by the end of 2026. That suggests a new and higher level of capex than the market expected, but its also backed by the $63 billion in total SpaceX backlog exiting Q3 2026. Per management, roughly $42 billion of that revenue will be recognized in the coming 12 months.

That upsized capex spending as well as the close relationship that has been noted between SpaceX and Nvidia (NVDA) explains the pre-market climb we are seeing in NVDA shares.

4. Super Micro Computer expects quarterly revenue and profit margin well above Wall Street estimates as it benefits from relentless AI data center demand, the server maker said on Tuesday, sending shares 11.3% higher in after-hours trading… Super Micro on Tuesday said it expects revenue between $18.5 billion and $19.5 billion in the first quarter, compared with analysts’ average estimate of $15.23 billion, according to data compiled by LSEG. That expectation is also ⁠well above the company’s prior revenue forecast of $14.5 billion to $15.5 billion. (Reuters)

Known key customers of Super Micro Computer include Meta (META), Microsoft (MSFT), Oracle (ORCL), and CoreWeave (CRWV), and Super Micro’s beat-and-raise revenue points to strong spending from that customer cohort and others. The pull through is positive for AI and data center chip providers like those we have in the Pro Portfolio.

Speaking of Meta…

5. According to a new report from Sensor Tower, not only did Meta’s Muse become the 12th app ever to reach 10 million US downloads in 40 days, but it is also outpacing its peers in user retention… US Muse users are returning to the app, which is averaging a 30% retention rate after 7 days, and a 23% retention rate after 14 days. Meta is currently outpacing AI competitors in its retention at the 7 and 14 day mark, as ChatGPT, Claude, and Grok averaged a 19% and 16% retention rate, respectively. Finally, Sensor Tower notes that Meta continues spending heavily to promote its AI assistant. According to the report, the app accounted for 39% of Meta’s advertising spend in the US so far this month, up from 23% in September. Muse also reportedly climbed from 73rd to 21st place among US brands ranked by advertising impressions. (9to5Mac)

That sets up Meta’s Q3 2026 quarterly earnings report after today’s market close. We continue to see the company’s advertising-led revenue stream benefiting from political ad spending as well as efforts to improve monetization across its app platform. However, the market is likely to pay close attention to Meta’s comments about AI adoption and usage, its impact on margins and capex plans. We expect a significant focus on those capex comments following SpaceX’s announced plans to double capex spending in the current quarter and its big plans for 2027. Tucked inside those capex comments, we’ll be interested in what Meta says about its custom AI silicon efforts.

6. Anthropic generated around $16.3 billion in revenue in the six months ended June 30, up from $1.1 billion in the year-earlier period, according to the draft prospectus. During that period, Anthropic spent nearly $9 billion on computing capacity and infrastructure, up from $2.3 billion spent on infrastructure during the same six months in 2025… The company is on the hook to pay around $450 billion in cloud computing agreements over the next seven to ten years. The bulk of these deals are noncancelable… Anthropic plans to spend $111 billion on Google cloud computing contracts, $110 billion with Amazon Web Services, and $31 billion on Microsoft, “regardless of actual usage.” The firm also agreed to spend up to $86 billion renting Nvidia chips from smaller AI cloud providers Nscale and Lambda through 2033 and 2034, respectively, in addition to other cloud deals. Including its more than $160 billion obligation to lease Google chips in a deal with Broadcom, Anthropic’s future infrastructure costs top $600 billion. The firm is negotiating additional computing deals that could see its commitments rise by as much as $150 billion, the materials show. (WSJ)

Normally, we would lump the spending revelation found in Anthropic’s S-1 as a positive for our positions in Alphabet (GOOGL), Amazon (AMZN), and Microsoft as well as our AI infrastructure plays that count them as customers. And while they are positive, the market’s attention is likely to be more tuned to Anthropic’s upcoming IPO and the targeted valuation. We recently noted that market chatter is suggesting a valuation between $1.5 trillion-$1.7 trillion, down from the targeted $2 trillion discussed a few months ago.

To the extent the IPO comes in closer toward the lower end of that range, the more likely the market will have renewed questions over Anthropic’s multi-year capex plans and how it plans to fund them. That also cuts the other way, which means that as folks read the S-1 what is discussed during the IPO roadshow will become increasingly important in shaping where Anthropic’s IPO prices.

7. Economic data today per TipRanks: Mortgage Applications Index (Weekly), EIA Crude Oil Inventories (Weekly).

8. Companies reporting today per TipRanks: AM – Abbot Labs (ABT), AT&T (T), Danaher (DHR), Elevance Health (ELV), M/I Homes (MHIO), NextEra Energy (NEE), Philip Morris International (PM), Teledyne Tech (TDY), Thermo Fisher (TMO). PM – CACI International (CACI), Crown Castle (CCI), CSX (CSX), Hexel (HXL), IBM (IBM), Lam Research (LRCX), Las Vegas Sands (LVS), Meta (META), SAP SE (SAP), Southwest Air (LUV), Tesla (TSLA), Texas Instruments (TXN), United Rentals (URI), Waste Connections (WCN).

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At the time of publication, TheStreet Pro Portfolio was long AMZN, GOOGL, META, MSFT, and NVDA.