Why Nvidia Stock Is the Big Winner From SpaceX Earnings

Why Nvidia Stock Is the Big Winner From SpaceX Earnings

**Elon Musk just handed Nvidia its strongest endorsement yet: SpaceX is going all-in on the chipmaker, building its AI empire exclusively on Nvidia systems. The announcement sent Nvidia shares higher while rival AMD tumbled nearly 9% after hours.**

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## "Exclusive to Nvidia": Musk's Endorsement Moves Markets

On SpaceX's first earnings call as a public company, CEO Elon Musk delivered a message that reverberated through the semiconductor industry. Going forward, SpaceX would build its AI and computing infrastructure **exclusively with Nvidia systems** .

"We think the Vera Rubin architecture is the best architecture. We think it's the best AI computer, and we greatly value our close cooperation and partnership on many levels with Nvidia," Musk told investors. "So we're exclusive to Nvidia" .

The announcement came as SpaceX reported its first quarterly results since its June IPO, beating expectations on both revenue and earnings. AI revenue climbed 213% quarter-over-quarter to $2.6 billion, driven by cloud service agreements and increased Grok and X subscriptions .

**The market's reaction was immediate and divided.** Nvidia shares rose roughly 3% during Tuesday trading and added another 1.8% after hours . AMD, which had been a supplier to SpaceX for rocket control systems and satellite computing equipment, plunged 8.99% after hours on fears of losing a major customer .

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## The Starmind Connection: Taking AI to Orbit

The partnership extends far beyond terrestrial data centers. SpaceX and Nvidia are jointly developing the compute payload for the **Starmind AI1 satellite**, a spacecraft designed to process AI workloads directly in low Earth orbit using Nvidia's latest Vera CPUs and Rubin GPUs .

SpaceX envisions an orbital network that could eventually grow to one million satellites, creating what would amount to a distributed AI supercomputer in space . The company has already asked the FCC for permission to deploy as many as one million orbital data center satellites between 311 and 1,243 miles above Earth .

**Nvidia's Space-1 Vera Rubin module can deliver up to 25 times the AI processing performance of an H100 GPU**, with commercial shipments expected to begin later this year . Prototype testing for Starmind AI1 is scheduled for early 2027, with mass production expected later that year .

Musk sees this as a solution to the growing challenge of building massive data centers on Earth. "Unlike their Earth-based counterparts, space-based solutions don't require companies to purchase large swaths of land," and cooling is less of an issue in orbit .

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## The Spending That's Moving Markets

SpaceX's commitment to Nvidia comes with a staggering price tag. The company's capital expenditures reached **$18.37 billion in the second quarter**, with $15.83 billion directed toward AI infrastructure—more than double the previous quarter and a 2,000% increase from a year earlier .

CFO Bret Johnsen defended the spending, noting that AI compute investments have "a period of recovery of less than a year" due to how quickly they are monetized . The company expects to end 2026 with more than **2 gigawatts of compute capacity** and close to **10 gigawatts by the end of 2027** .

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## Why This Matters for Nvidia's Future

The SpaceX deal represents a significant expansion of Nvidia's **"space computing"** portfolio. When Nvidia introduced its space platform in March, it named six launch partners but did not include SpaceX . Tuesday's announcement adds the aerospace giant to that ecosystem.

**The timing is critical.** Nvidia's stock has been trading in a narrow range around $200 for months, up just 10.8% year-to-date . With hyperscaler capex spending continuing to rise, some investors have worried that costs for other AI hardware—like memory chips—could eat into Nvidia's share of the budget . The SpaceX commitment helps answer that concern.

Needham analysts maintain a buy rating on Nvidia with a $270 price target, expecting 91,000 racks of Vera Rubin processors to ship in 2027 . The average analyst price target currently sits around **$314** .

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## The Other Side of the Coin

Not everything is smooth sailing. Nvidia's recent practice of extending supplier financing to AI startups—described by Barron's as acting as both "venture capitalist and central bank"—has raised questions about the sustainability of AI spending . The company's credit default swaps widened in July, signaling that investors are increasingly treating Nvidia as a financial counterparty, not just a chip supplier.

For SpaceX, the AI spending comes with its own risks. The company is burning cash at an unprecedented rate, and the Starmind satellite project has yet to prove it can generate a return. As one analyst noted, "The results give Elon Musk credibility and time, but the company will have to keep producing exceptional numbers to avoid its valuation being pulled back to reality" .

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## Frequently Asked Questions

### Q: What did Elon Musk announce about Nvidia and SpaceX?

A: Musk said SpaceX will build its AI and computing infrastructure **exclusively on Nvidia systems**, using the chipmaker's Vera Rubin architecture for both ground-based data centers and the Starmind orbital AI satellite project .

### Q: How did the announcement affect Nvidia and AMD stocks?

A: Nvidia shares gained about 3% during Tuesday trading and added another 1.8% after hours. AMD plunged 8.99% in after-hours trading after Musk confirmed SpaceX would stop purchasing AMD chips .

### Q: What is the Starmind AI1 satellite?

A: Starmind AI1 is a satellite being jointly developed by SpaceX and Nvidia to perform advanced AI computing directly in low Earth orbit. It will use Nvidia's Vera CPUs and Rubin GPUs and is part of a broader plan to create a network of up to one million orbital data center satellites .

### Q: How much is SpaceX spending on AI infrastructure?

A: SpaceX's capital expenditures hit $18.37 billion in Q2 2026, with $15.83 billion directed toward AI infrastructure—more than double the previous quarter and a 2,000% increase from a year earlier .

### Q: Is Nvidia stock a buy?

A: Analysts have a consensus price target of roughly $314, implying about 52% upside from current levels. Needham has a $270 target, while other firms range from the mid-$200s to above $400 .

### Q: Does the SpaceX deal change Nvidia's outlook?

A: It reinforces Nvidia's dominance in AI compute and extends its reach into the emerging orbital computing market. However, questions remain about the sustainability of AI spending and Nvidia's growing role as a financier for its own customers .

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## Disclaimer

**IMPORTANT:** This article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. The information contained herein is based on publicly available sources and reflects the author's understanding as of the publication date. Market conditions, stock prices, and company performance are subject to rapid change. Past performance is not indicative of future results. You should consult with a qualified financial advisor before making any investment decisions.

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*Published: August 5, 2026*

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**Tags:** Nvidia, NVDA, SpaceX, SPCX, AMD, AI chips, Elon Musk, Starmind, Vera Rubin, orbital computing, AI infrastructure, semiconductor stocks, stock market, AI data centers