SpaceX reported second-quarter capital expenditures of $18.4 billion, exceeding estimates and causing its shares to fall over 7%. In contrast, Nvidia's stock gained more than 3% after Musk declared the company would be SpaceX's exclusive chipmaking partner for its AI initiatives.
This divergence illustrates the current market dynamics where hyperscalers like SpaceX face scrutiny over their AI spending, while chipmakers like Nvidia benefit from increased demand. Analysts are optimistic about Musk's comments, with Melius Research's Ben Reitzes suggesting they could support Nvidia CEO Jensen Huang's prediction of $1 trillion in annual revenue by 2027.
Chris Caso from Wolfe Research estimated that SpaceX's potential demand could translate to nearly $200 billion in revenue for Nvidia by 2027. However, Musk acknowledged uncertainty regarding the scale of spending and the timeline for infrastructure buildout, raising questions about financing and the potential role of Nvidia in that process.
Meanwhile, AMD's stock fell over 7% following its earnings report, which showed a significant increase in capital expenditures, indicating a competitive landscape among chipmakers