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SpaceX (SPCX) shares rose about 6% on Friday after Elon Musk offered to cancel any federal contract the government no longer wants, stating that government work represents less than 10% of the company’s revenue this quarter.
The move follows a sharp decline in the stock’s value. SpaceX lost 12.5% of its market value in the two trading sessions following the midterm elections, where Democrats won control of Congress. This drop left buyers from the June IPO below their $135 entry price, a level the stock first breached in late October before recovering above $140 prior to the vote.
Musk’s Offer and Revenue Breakdown
Musk made the offer in response to Warren Redlich, who had urged him to provide Democrats with a list of contracts available for cancellation. In a post dated November 6, 2026, Musk wrote: “Moreover government revenue will be less than 10% of SpaceX revenue this quarter and less then 5% a year from now. Happy to cancel any that the government doesn’t want. Just say the word!”
Based on Musk’s 10% figure, government work would account for at most approximately $1.46 billion of SpaceX’s $14.58 billion third-quarter revenue. However, this figure is a forecast that has not yet been confirmed by official results. The company’s S-1 filing, submitted before its public listing, previously placed US government agencies at about one-fifth of 2025 revenue.
Musk also noted that Tesla has no government contracts and that President Trump ended federal incentives for electric vehicles. He added that SpaceX’s government contracts represent both the best product and the lowest price. The company’s AI division has grown significantly, bringing in $7.56 billion of the third-quarter total, now producing more than half of SpaceX’s sales.
Political and Regulatory Outlook
Despite the stock rebound, Washington’s dependence on SpaceX’s rockets and satellites remains a factor. In September, NASA added $946 million to SpaceX’s astronaut contract, bringing the total value to $5.92 billion. TipRanks argued that the US government still relies on these assets.
Democrats, who won Congress in the recent elections, can hold hearings and demand records starting in January. However, an investigation alone would not cancel existing contracts. Gina Hinojosa, the Democrat who won the Texas governor’s race, plans to pause new data center approvals until power and water protections are in place. This policy targets the AI business segment, which now drives the majority of SpaceX’s revenue.
Hinojosa and the new Congress both take office in January. Fourth-quarter results will determine whether government revenue actually drops below the 10% threshold Musk cited.
Frequently Asked Questions
How much of SpaceX’s revenue comes from the government?
Elon Musk stated that government work is under 10% of SpaceX revenue this quarter and will be under 5% a year from now. This would amount to approximately $1.46 billion of the company’s $14.58 billion third-quarter revenue.
What is Gina Hinojosa’s plan for SpaceX?
Gina Hinojosa, who won the Texas governor’s race, wants to pause new data center approvals until power and water protections are in place. This plan targets SpaceX’s AI division, which produces more than half of the company’s sales.
