00:00 Speaker A
Elon Musk’s SpaceX just inked a deal that will take the space and rocket company closer to its 100 billion annual recurring revenue target this year. Yahoo Finance’s Pras Subramanian joins now with a closer look. Pras.
00:10 Pras Subramanian
Yes, so uh basically CFO Brett Johnson was at the Goldman Sachs conference uh this this past couple days and had a kind of a keynote speech uh speech there with one of the uh presenters there and said talked about how they had signed a new deal, a 1.1 billion dollar uh compute deal, uh that goes through I believe starting the 1st of December, uh that would be worth 13 billion of ARR, uh which would lead them to kind of, he said confirm or almost like be on track for the 100 billion in ARR, which is annual recurring revenue by 2020 end of 2026. So, that’s kind of a big move. I think people thought that, you know, um a bunch of things right. People thought how could they get to $100 billion dollars in AR, right?
00:54 Pras Subramanian
And then you start seeing these compute deals layer up one after another after another. You have three, you have three big deals here right with you have you have Google, you have Anthropic, you have this one that they just mentioned that that Johnson just mentioned. You had another one that Johnson mentioned before in the earnings call. So you’re you’re at 45 billion ARR right now. So to get to 100 billion, you know, you got rockets, you got Starling, you got all these different things to kind of add up. So it seems like they will be potentially on track for that for that big milestone.
01:21 Speaker A
And how is Wall Street uh taking to this? I mean, what’s the reaction from analysts when it comes to this big compute deal?
01:29 Pras Subramanian
So, uh William Blair analyst Louis De Palma talked about this, talking about how uh SpaceX is winning the AI compute business, right? Because uh they’re basically benefiting from the ability to quote deploy capacity much faster than their peers, take advantage of unprecedented demand for compute capacity. Uh they also have been noted the big deal they have with Nvidia, right? They have a big uh kind of not an exclusivity but a but a strong uh connection there with the ability to get these chips, these GPUs they need for data centers. Uh and you know, we wrote about this before, the Nvidia connection is going to be in their orbital data centers, you know, those special orbital data data center chips from Nvidia will be powering those. So they have that connection with the uh the suppliers, the they have the the the the customers that demand this compute. Uh so it seems like a pretty big business for a company that’s ostensibly a rocket and satellite business.
