Stocks climb late as Tesla, Meta results ease AI doubts

Wall Street's bet on artificial intelligence picked up again on Wednesday, Oct. 21. Stocks rose in late trading after Tesla ↗ 5.21% and Meta Platforms ↘ 1.88% posted results that eased doubts about the trade behind the bull market, Bloomberg reported. An exchange-traded fund that tracks the S&P 500 ↗ 0.71% gained after the close. Earlier, a strong quarter from SpaceX had pushed tech shares higher during regular trading.swissinfo.ch

Tesla's surprise cash flow

Tesla's third-quarter profit beat estimates, with adjusted earnings of 48 cents a share, Transport Topics reported. The automaker brought in $1.53 billion in free cash flow, while analysts had expected it to burn $4.92 billion, because it spent much less than forecast on its AI and robotics plans, according to Reuters. Revenue was flat at $28.05 billion, Forbes reported. The results came as Elon Musk said a merger of Tesla and SpaceX "would be a good idea," The Wall Street Journal reported.reuters.com+3

Meta's spending and new shares

Meta's revenue rose 26% to $64.6 billion, ahead of the $63.3 billion analysts expected. The company raised the low end of its 2026 capital spending forecast to $135 billion, keeping the top of the range at $145 billion, Fortune reported. Third-quarter capital spending came to $34.9 billion, and free cash flow was negative $2.1 billion. Meta also forecast fourth-quarter revenue above estimates. It plans to issue a new class of nonvoting stock, which would help pay for its costly AI expansion, and its shares rose more than 4% in extended trading, Reuters reported. "Our investments are paying off, the core business is strong, and we're seeing velocity across the board," CEO Mark Zuckerberg said in the report, according to Bloomberg.fortune.com+2

SpaceX lifted the session

SpaceX reported after the market closed on Tuesday, Oct. 20. Revenue rose 161% to $14.6 billion and net income came to $4.4 billion, CNBC reported. It was the company's first profit since going public, and its shares ended Wednesday up 7.8%. Together with gains in Super Micro Computer ↘ 0.76%, that helped the Nasdaq Composite lead the market higher, according to Reuters. The Nasdaq 100 rose 1.1% in regular trading, Bloomberg said.cnbc.com+1

Some investors remain cautious. Billionaire Ken Griffin said markets are "almost certainly" in an AI bubble. "Despite hedge funds sharply reducing tech exposure, the market isn't giving up on AI," said Mark Hackett of Nationwide. "Investors simply want to see the payoff, and SpaceX earnings may be an early sign of that," Bloomberg reported.swissinfo.ch