William Blair Reaffirms Outperform Rating on SpaceX
William Blair analyst Louis DiPalma reiterated an Outperform rating on SpaceX (NASDAQ: SPCX).
“Yesterday evening, SpaceX’s Bret Johnsen announced at an investor conference that SpaceX’s SpaceXAI subsidiary in early September closed a new compute deal for $1.11 billion per month, or $13.3 billion on an annualized basis.
SpaceX confirmed to us that this $13.3 billion deal for an undisclosed customer is actually different from the $6.7 billion/6-month deal ($13.4 billion annualized) that was announced on its August earnings call.
Last night’s deal is SpaceXAI’s fourth compute agreement in the past four months that is greater than $11 billion in ARR.
In May, SpaceX previously announced a deal with Anthropic for $1.25 billion per month ($15 billion ARR) and a deal early June with Google (GOOG $330.39; Outperform) for $920 million per month.
We suspect the $6.7 billion/6-month deal that was announced on the earnings call is with the U.S. Department of Defense.
SpaceX on its August earnings call guided for $100 billion in ARR by the end of 2026. Johnsen indicated that he has even more conviction now in achieving the $100 billion ARR target in December.
SpaceX continues to target having 5 to 10 gigawatts of compute deployed by the end of 2027, up from a 2 gigawatt target for the end of 2026.
SpaceX has benefited from its ability to deploy capacity much faster than peers to take advantage of the unprecedented demand environment for compute capacity.
In addition, SpaceX has benefited from its close relationship with Nvidia (NVDA $218.36; Outperform) that provides SpaceXAI with priority allocation to GPUs.
Starship Flight 14 is expected to take place in late September, which is in line with our prior estimate.
In August, CEO Elon Musk announced that SpaceX will likely achieve the milestone of catching its Starship over the next couple of months.
Johnsen indicated that SpaceX is now targeting to achieve this feat by the end of the year.”
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