Futures orbit around SpaceX as Tesla merger talk cheers investors

Hello, I’m Leonie Kidd, in charge of today’s Morning Squawk.

At the center of the biggest market-moving story of the day is one man: Elon Musk.

He’s been making headlines for everything from SpaceX and Tesla’s potential mega-merger plan, to the astronomical returns from SpaceX, to the Tesla-Starlink conflict to more to come.

space x Stocks soared in pre-market trading after Elon Musk announced that he has formed a special committee to work on a merger between Rocket Group and Tesla Inc., calling it a “good idea.”

Musk also said he was representing “opposing parties”, meaning he would not take part in the talks.

It will be the largest merger in history, creating a giant company worth approximately $3.5 trillion. Tesla shares were also rising in early trading.

Why it matters: Terafab, the two companies’ existing joint venture, aims to test its first SRAM chip by June next year, with a goal of 1 terawatt of computing power per year. Musk said a full merger would mean “we have a lot to gain by working together to develop superintelligent software.”

The bullish case: Deepwater’s Gene Munster told CNBC that the deal, subject to shareholder approval, would be a “slam dunk” and create “the most unique company in the world in every way.”

Bear case: Terafab’s aggressive schedule depends on acquiring complex equipment from suppliers such as ASML, Applied Materials, and KLA.

And don’t forget the numbers. News of the merger came alongside a series of surprising numbers for SpaceX, where third-quarter revenue soared 161%, exceeding expectations. But Moffett Nathanson’s Julie Chu highlighted the “huge demands on capital looming over the next few years.”

Exceeding profits alone is not enough to rejoice Netflix Stock prices widened in pre-market trading. The numbers are:

Earnings per share: 87 cents vs. 82 cents estimated Revenue: $12.87 billion vs. $12.87 billion estimated Full-year forecast: Revenue reduced to $51.1 billion at the low end of the range

Analysis: Investors and analysts across the board blamed a lack of breakout hits for Netflix’s poor performance, and Rich Greenfield of LightShed said unclear guidance was causing investors to lose confidence in the stock. Industry view: Kevin Mayer, a former Disney executive and co-CEO of Candle Media, told CNBC that while Netflix has “hit a wall,” he can’t put all the blame on outgoing executive Bela Bajaria, adding that her replacement, Peter Rice, is a good hire.

Big move in Europe: EssilorLuxottica beats revenue estimates and leads Stoxx 600 despite weak smart glasses sales. Carrefour is at the bottom of the European market after the French riots announced a hit to the supermarket group’s profits this year. Meanwhile, sportswear giant Adidas raised its profit forecast, and its stock price rose on the Frankfurt market.

There will be a lot of movement after the bell today, with earnings expected. meta and tesla.

Social Dilemma: Following the release of AI agent Muse in September, analysts are largely bullish on Meta’s entry into these revenues. Since its launch, the stock price has increased 15%.

However, you need to be careful. Meta beats earnings estimates 88% of the time, according to Bespoke data, but missed the top line last quarter, sending the stock down nearly 8%. The stock price also fell sharply after the company’s release of Q1 2026 and Q3 2025.

Roadster hit: It’s been a tough quarter for auto stocks, and it could weigh on Tesla. Shipments decreased by 2% year-on-year, but exceeded expectations.

But be careful. Tesla has missed analyst profit estimates in two of the past four quarters and only beats sales 58% of the time, according to Bespoke.

Elon Musk has ordered the slowdown of SpaceX’s version of Starlink, which Ukraine has relied on in its war against Russia. The Wall Street Journal reported this, citing U.S. officials and people close to the matter.

The report was released amid contradictory accounts of how the decision to delay Kiev’s Starlink was reached, with Musk previously claiming to X that it was a call from “the US military and ultimately the president.”

CNBC will talk about the decision at 8:40 a.m. after Sen. John Cornyn (R-Texas) said it was “reckless to support President Putin in Ukraine.”

US President Donald Trump on Wednesday called on data center companies to “make deals” with local communities to secure support for expensive facilities.

President Trump said data center operators should pay “dividends” to communities and individuals within them to make data centers more popular.

OpenAI’s most powerful AI models overrode their own safety monitoring, and one of them lied about it

OpenAI revealed that agents operating two of the company’s most powerful models were overriding their own safety monitoring while performing daily tasks, although one of them later denied doing so.

The agent, powered by GPT Sol 6.1, disabled automatic alerts to OpenAI’s security team, the company said in a blog post late Tuesday. In another task, the GPT-6 Astra agent migrating the program removed a monitoring integration and falsely claimed it had not. The incident occurred during an internal coding effort.

—CNBC’s Caleigh Keating, April Roach, Kevin Breuninger and Kai Nicol-Schwarz contributed to this report.

John Meloy edited this version.