Musk: SpaceX (SPCX.US) Q4 revenue expected to grow about 70% quarter-over-quarter; government contract revenue share to fall below 10%

Elon Musk said Friday that SpaceX (SPCX.US) will continue to become less dependent on U.S. government procurement contracts. In a response to a user on social media platform X, he said payments from government agencies will account for less than 10% of SpaceX's revenue this quarter, compared with 16.6% in the most recent quarter. On the same day, Musk gave an optimistic growth forecast at the Baron Capital investment conference, saying SpaceX's fourth-quarter revenue will grow "about 70%" from the prior three months, and reiterated that annualized revenue is expected to reach US$100 billion this year and exceed US$500 billion by the end of 2027. SpaceX closed up 8.62% on Friday. **Declining Dependence on Government Contracts** The share of SpaceX's revenue from government contracts continues to decline steadily. In the past, contracts from NASA and the U.S. Department of Defense underpinned SpaceX's most profitable business partnerships. Now, SpaceX is increasingly reliant on a handful of customers renting computing power from its data centersa business model Wall Street has recently viewed pessimistically for these new AI cloud service providers (Neoclouds). SpaceX has become a pillar of the U.S. space program and has benefited from numerous contracts to transport astronauts and launch critical national security satellites for NASA and the Pentagon. Rival contractors have also complained that the Pentagon tailors contract terms so narrowly that only SpaceX can win the bids. Musk previously predicted that NASA, historically SpaceX's largest customer, will account for only 5% of the company's revenue this year. SpaceX still holds a key contract with NASA to send humans to the moon aboard the Starship rocket as early as 2028. **AI Computing Business Takes Over** In 2025, contracts from all government agencies working with SpaceX accounted for about one-fifth of the company's revenue. But Anthropic PBC is now the company's largest customer, contributing more than one-third of revenue last quarter. Recently, however, reports said Microsoft Corporation (MSFT.US) is gradually ending its arrangement to rent AI computing power from Oracle Corporation (ORCL.US). The news highlights the fragility of such contracts. SpaceX has spent the past several quarters adjusting its revenue mix, shifting from reliance on government contracts toward generating more business from AI and its Starlink satellite business. Musk also said he would be willing to acquire a major wireless carrier if the opportunity arose to obtain valuable spectrum resources. SpaceX has acquired large swaths of spectrum over the past year, to be used for its emerging hybrid satellite-terrestrial wireless network. Executives including Musk said on a recent earnings call that computing power demand has increased at SpaceX's data center in Memphis, Tennessee. This helped SpaceX's AI business turn profitable for the first time. Anthropic, SpaceX's largest customer, could exit its agreement with SpaceX as early as next year after a notice period. Musk's company also has contracts with other tech companies, including Alphabet Inc. Class C (GOOGL.US). Musk has sought to distinguish SpaceX from other new cloud service providers and tech companies, saying the company also has revenue from its launch and connectivity businesses. But according to quarterly filings, growth in AI revenue has outpaced these two business segments. Musk's revenue forecast came days after Democrats won control of the House and Senate. The billionaire spent more than US$445 million supporting Republicans, a move that could put his companies at risk.