SpaceX Shares Rebound Sharply on Bullish Outlook
TREE NEWS reports: SpaceX stock jumped 9.1% to $134.91 on Friday, marking its largest single-day gain since August 12, following optimistic comments from CEO Elon Musk at a major investment conference. The rally reversed a two-day slide that had shaved 9% off the share price.
Musk told attendees that SpaceX’s fourth-quarter revenue is expected to grow about 70% sequentially from the third quarter. He also reiterated that the company is on track to reach a $100 billion annualized revenue run rate by December, and projects that figure will exceed $500 billion by the end of 2027.
Government Revenue Share Plummets as AI Business Takes Off
A key disclosure was the rapid decline in revenue from U.S. government contracts. Musk said government-related revenue will fall below 10% of total sales this quarter, down from 16.6% in the previous quarter and roughly 20% for all of 2025. He emphasized that SpaceX offers the best products at the lowest prices, suggesting the company is not overly concerned about potential contract cancellations.
Instead, artificial intelligence customers are now driving growth. Anthropic has become SpaceX’s largest single customer, contributing more than one-third of quarterly revenue, while Google parent Alphabet also holds computing-power leasing contracts. Musk noted that the Memphis, Tennessee data center is seeing rising demand and that the AI business turned profitable for the first time this quarter.
Market Implications: A High-Beta Play on AI and Space
SpaceX’s sharp rebound highlights its sensitivity to Musk’s forward-looking statements, which can move the stock dramatically. The shift away from government dependence toward commercial AI and satellite services could appeal to investors seeking exposure to two high-growth themes: space infrastructure and AI compute.
However, the stock remains under pressure longer term. It has fallen 10.32% over the past five trading days and 28.13% over the past month, well off its 52-week high of around $226. Technical analyst Ali Martinez warned that a break below the mid-channel could send shares down another 12% to $108, near the historical low of $104.83. He also attributed some selling pressure to the October unlock of roughly 2 billion shares.
The AI compute leasing business carries risks. Microsoft is reportedly phasing out a data center agreement with Oracle, underscoring the fragility of such contracts. Moreover, Anthropic could exit its partnership as early as next year after a notice period. The recent Democratic takeover of both chambers of Congress also raises questions about future government contract relationships, given Musk’s substantial political donations to Republicans.
Key Takeaways for Investors
- SpaceX’s revenue mix is shifting rapidly toward AI and commercial customers, reducing reliance on government contracts—a potential long-term positive but with near-term execution risks.
- The stock is highly volatile and sensitive to Musk’s public forecasts; investors should expect sharp swings around news events.
- Risks include contract concentration (Anthropic), potential customer churn, share lockup expirations, and political headwinds.
- The AI data center business is profitable but faces competitive and contractual uncertainties; monitor customer diversification.
- Musk also noted Tesla’s Model Y is now the world’s best-selling vehicle across all categories, reinforcing Tesla’s global competitive position.
