Musk: SpaceX (SPCX.US) Q4 revenue is expected to increase by about 70% month-on-month, and the share of government contract revenue will fall below 10%

The Zhitong Finance App learned that Elon Musk said on Friday that SpaceX (SPCX.US)'s dependence on US government procurement contracts will continue to decline. Responding to users on social media platform X, he said that payments from government agencies will account for less than 10% of SpaceX's revenue this quarter, compared to 16.6% in the most recent quarter. On the same day, Musk gave an optimistic growth forecast at the Barron Capital Investment Conference, saying that SpaceX's fourth quarter revenue will increase “about 70%” from the previous three months, and reiterated that this year's annualized revenue is expected to reach 100 billion US dollars and exceed 500 billion US dollars by the end of 2027. SpaceX closed up 8.62% on Friday.

Dependence on government contracts continues to decline

SpaceX's share of government contract revenue continues to decline steadily. In the past, contracts between NASA and the US Department of Defense supported SpaceX's most profitable business cooperation. Today, SpaceX is increasingly dependent on a small number of customers leasing computing power from its data centers — Wall Street has recently been pessimistic about this new AI cloud service provider (Neocloud) business model.

SpaceX has become a mainstay of the US space program and has benefited from numerous contracts to transport astronauts and launch important national security satellites for NASA and the Pentagon. A rival contractor also complained that the US Department of Defense made the terms of the contract too narrow; only SpaceX was able to win the bid.

Musk previously predicted that NASA, SpaceX's biggest customer in history, will account for only 5% of the company's revenue this year. SpaceX still has a key contract with NASA to use Starship rockets to send humans to the Moon as early as 2028.

AI computing power business takes over

In 2025, contracts from all government agencies that SpaceX cooperates with account 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 its revenue last quarter.

However, there are recent reports that Microsoft (MSFT.US) is gradually phasing out arrangements to rent AI computing power from Oracle (ORCL.US). This news highlights the fragility of such contracts.

SpaceX has been adjusting its revenue structure over the past few quarters, moving from relying on government contracts to getting more business in the AI and Starlink satellite business.

Musk also said he is willing to buy a major wireless operator if given the opportunity to obtain valuable spectrum resources. SpaceX has acquired large tracts of spectrum over the past year to be used in its emerging hybrid satellite and terrestrial wireless networks.

Executives including Musk said during a recent earnings call that SpaceX's data center in Memphis, Tennessee, is in increasing demand for computing power. This helped SpaceX's AI business become profitable for the first time.

SpaceX's largest customer, Anthropic, can withdraw from the agreement with SpaceX as early as next year after the notice period expires. Musk's company also has contracts with other technology companies, including Google (GOOGL.US), a subsidiary of Alphabet.

Musk previously tried to differentiate SpaceX from other new cloud service providers and technology companies, saying that the company also has revenue from the launch and connectivity business. However, according to quarterly documents, AI revenue growth has surpassed these two business segments.

A few days before Musk made this revenue forecast, the Democratic Party won control of the House and Senate. The billionaire spent more than $445 million to support the Republican Party, a move that could put his company at risk.