Think SpaceX, and you probably picture a rocket. This quarter, the bigger money may come from something far less dramatic: rented computer chips.

SpaceX (SPCX) rents AI computing power from its Colossus 2 data center to companies such as Google and Reflection AI. Wall Street calls that kind of business a neocloud.

Deutsche Bank estimates it will make up more than half of SpaceX’s fourth-quarter revenue.

That’s according to a Nov. 9 Deutsche Bank research report seen by TheStreet, titled “Several large moving parts.”

One disclosure worth knowing up front: Deutsche Bank helped manage a SpaceX stock offering in the past year and expects to seek more banking business from the company, the note’s disclosures show.

The SpaceX quarter: Musk just raised the bar

The note follows Elon Musk’s appearance at the Baron Investment Conference on Nov. 6.

Musk signaled fourth-quarter revenue could rise about 70% from the third quarter, the note said. Analyst Edison Yu raised his forecast to $24.5 billion from $23.6 billion, above the $22.6 billion Bloomberg consensus.

By my math, that’s about 8% above what Wall Street expected a few weeks ago.

Musk also said the first quarter of 2027 could “maybe” see “something similar,” the note said. Another 70% jump would put revenue above $40 billion, well past SpaceX’s own guidance of $33 billion to $37 billion.

Yu estimated SpaceX will exit 2026 at an annual revenue run rate of about $104 billion. He also sees fourth-quarter gross margin near 60%, above the roughly 55% management had flagged.

The stock liked what it heard. SpaceX shares jumped 8.6% to $134.27 on Nov. 6, after falling nearly 20% over the prior month, TheStreet reported.

Deutsche Bank lifted its SpaceX fourth-quarter forecast after Elon Musk’s Baron comments and kept its $250 target.

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SpaceX computing contract rates are climbing fast

The most striking detail in the note is a table of SpaceX’s AI computing contracts.

Deutsche Bank estimates SpaceX’s first big customer pays an average of $7.78 per GPU hour across its chips. By the bank’s estimates, Google pays about $11.46 for Nvidia’s newer GB300 chips, and a second unnamed customer pays about $13.90 for the same hardware.

Related: Tesla-SpaceX merger math just shifted in Tesla’s favor

For future deals, the bank models $14 an hour. By my math, that’s about 80% more than the blended rate on SpaceX’s first contract.

Reflection AI’s deal shows how these contracts work. The startup pays about $150 million a month for GB300 access at Colossus 2, and either side can exit with 90 days’ notice after the first three months, Data Center Dynamics reported.

That exit clause cuts both ways. Yu raised the possibility that SpaceX could use it to reprice deals, or pull capacity back for its own AI work.

“SpaceX could initiate the 90-day termination clause on existing deals and essentially charge its customers even higher prices,” Yu wrote.

He was careful to add that Deutsche Bank doesn’t model those “more extreme outcomes.”

After the U.S. midterms, Yu also expects AI computing prices to stay high for longer, because he thinks the pace of data center buildouts will slow, mainly in 2028. Less supply means higher prices for whatever capacity gets built.

That’s why he raised his 2027 revenue estimate to $193.2 billion from $184.4 billion.

The Tesla wrinkle: A cheaper merger?

Tesla and SpaceX have formed committees to study a potential merger, and Musk has called the idea “a good idea,” the Khaleej Times reported.

Yu had assumed SpaceX would need to pay Tesla shareholders a hefty premium to win the vote and avoid legal fights. That expectation may have helped put a floor under Tesla’s stock.

More on SpaceX:

• Morgan Stanley says SpaceX stock is now cheaper than the S&P 500
• Goldman Sachs and Apollo changes position on SpaceX
• Jim Cramer reveals why he won’t buy SpaceX stock

Now he isn’t so sure. “Tesla’s shareholders may be willing to accept a lower price/premium to ensure a merger happens more quickly,” Yu wrote.

If you own Tesla partly as a bet on a rich buyout price, that’s worth thinking about.

The fine print: big spending, longer timelines

Yu kept his SpaceX Buy rating and $250 price target. By my math, that implies about 86% upside from the Nov. 6 close, though the stock still sits about a third below its 52-week high of $201.80.

The spending is enormous, though. Deutsche Bank models about $299.5 billion in capital spending for 2027, roughly 1.55 times its revenue forecast for the year, by my math.

The bank is also more cautious than Musk on orbital computing. Musk expects AI satellites to launch in the third quarter of 2027 and scale in 2028, but Yu doesn’t see material capacity until 2029 or 2030.

For now, the story is simpler than space data centers. SpaceX is renting out AI chips at rising prices, and that rental business is growing faster than Deutsche Bank expected just two weeks ago.

Related: Elon Musk sends a strong signal to SpaceX stock investors