Elon Musk said on an earnings call that SpaceX has decided to fully adopt NVIDIA’s AI chip architecture and sharply increase data center compute capacity. After the comment, NVIDIA (NASDAQ: NVDA) rose 3.4% and was trading at $219.22 at the time of writing, while rival AMD fell 7.04% to $482.05.
The report said AMD’s latest earnings had topped Wall Street expectations, but the market had previously expected AMD to share SpaceX orders alongside NVIDIA. After Musk made SpaceX’s position clear, AMD stock quickly came under pressure.
SpaceX backs NVIDIA across its AI chip deployment
On the latest earnings call, SpaceX said it had decided to use NVIDIA chip products across the board and described the Vera Rubin architecture as the best current AI chip architecture. The report framed that as a major win for NVIDIA.
In addition to its rocket launch business, SpaceX was described as also operating xAI business lines and leasing data center infrastructure to outside users. Musk said SpaceX expects compute capacity to reach about 2 gigawatts by the end of this year and plans to raise that to 10 gigawatts next year. That purchasing decision gives NVIDIA an exclusive supply-chain position with a key customer, according to the report.
Orbital data center plan also mentioned
The report said SpaceX plans to build orbital data centers powered by NVIDIA chips in the future to address tightening land and power constraints facing ground-based facilities. The idea is to avoid on-earth resource bottlenecks through space deployment and provide continuous computing services.
AMD retreats as valuation gap draws attention
After SpaceX announced the purchasing decision, NVIDIA shares moved higher while AMD pulled back. The report said AMD had posted earnings above Wall Street analysts’ expectations, but with the stock already at a high point in its year-to-date rise, the negative read-through triggered profit-taking.
Market commentary cited in the report said NVIDIA’s valuation looked relatively attractive ahead of its next earnings release. FactSet data showed AMD trading at about 44x forward earnings, compared with 19.4x for NVIDIA. Wall Street advisers cited in the report said that after AMD’s positive catalysts had largely been priced in, some capital could rotate back into NVIDIA because of its stronger supply-chain position.