Analyst Price Targets Surge Following Q3 Results

Following the release of third-quarter 2026 earnings after the close on October 20, financial institutions swiftly increased their projected stock valuations. This adjustment in outlook occurred alongside a rise in share value during after-hours and premarket activity on October 21.

The company reported revenue of $14.6 billion, representing a 161 percent year-over-year increase that exceeded consensus estimates of approximately $12.7 billion. Net profit reached $4.4 billion, reversing a loss recorded in the prior year, while adjusted EBITDA was reported at $8.8 billion.

During the earnings call, executives provided revenue guidance for the first quarter of 2027 ranging from $33 billion to $37 billion. This projection significantly exceeded the approximately $22 billion analysts had previously modeled. Management also detailed plans for capital expenditure in the fourth quarter of between $35 billion and $40 billion, directed toward AI compute infrastructure at locations including Memphis and Southaven.

The company's Super Intelligence division generated roughly $7.6 billion in revenue, becoming the largest contributor to total revenue with growth of nearly 830 percent year-over-year. The Connectivity segment contributed $5.2 billion, supported by subscriber additions that increased the Starlink consumer base to 13.6 million. Capital expenditure plans for the fourth quarter were also detailed, focused on AI compute infrastructure at sites including Memphis and Southaven.

Following the report, several financial institutions adjusted their price targets upward. JPMorgan raised its target to $500 from $240, while Cantor Fitzgerald moved its target to $345 from $246. Barclays and Morgan Stanley both set targets at $300, with Morgan Stanley maintaining an Overweight rating. Citi, UBS, and TD Cowen raised their targets to $240, $230, and $224 respectively, while Wells Fargo and Clear Street moved their targets to $274 and $248.

The rationale for these revisions generally pointed to the strong quarterly performance, accelerating AI compute expansion, Starlink progress, and Starship milestones as drivers of higher long-term growth and earnings power. Executives outlined plans to reach 2.5 to 3 gigawatts of nameplate compute capacity by year-end, with pathways to 13 gigawatts or more by the end of 2027.

Shares closed at $147.79 on October 20 before rising roughly 8 percent in early premarket trading on October 21. The company's guidance for the first quarter of 2027 remains significantly above prior analyst models, and while the average analyst price target has moved higher, elevated spending remains a point of focus.