NVIDIA Stock Rises as SpaceX Commits to Using Its AI Chips

• Nvidia stock jumped toward $220 after SpaceX committed to using its AI chips.
• Elon Musk said SpaceX would build its computing infrastructure exclusively on Nvidia.
• Analyst targets and technical patterns point toward $300, but the move remains conditional.

Nvidia stock jumped sharply on Wednesday after Elon Musk endorsed the company’s next-generation artificial intelligence chips.

NVDA gained about 4% and approached $220 after SpaceX said it would build its computing infrastructure exclusively around Nvidia products.

The commitment strengthened expectations for future data-center demand. However, Nvidia stock must first clear its previous record near $236 before $250 and $300 become relevant targets.

Musk said during SpaceX’s first public earnings call that the company had decided to build exclusively on Nvidia.

He identified Nvidia’s upcoming Vera Rubin architecture as the strongest option for SpaceX’s planned computing expansion.

“We’ve decided to build exclusively on Nvidia because we think the Vera Rubin architecture is the best architecture,” Musk said, according to an earnings-call transcript.

The commitment excludes rival accelerators from AMD and other chip designers for SpaceX’s planned infrastructure.

It also provides Nvidia with a large potential customer as SpaceX expands the artificial intelligence operations it acquired through xAI.

SpaceX said it planned to install over two gigawatts of computing capacity by the end of 2026. Its longer-term goal included reaching about 10 gigawatts during 2027, according to reporting on the earnings call.

SpaceX’s artificial intelligence division generated about $2.6 billion in second-quarter revenue. However, the unit also recorded heavy losses as the company increased infrastructure spending.

The company spent $18.4 billion on capital expenditure during the quarter, with most of that amount directed toward artificial intelligence infrastructure.

That spending could translate into large Nvidia orders. However, SpaceX did not disclose a fixed dollar value for its future GPU purchases.

The original draft also listed monthly payments from Anthropic and Google.

Available earnings materials did not support the claims that Anthropic pays SpaceX over $1 billion monthly or that Google will pay $925 million per month. Those figures should remain excluded without named contracts or regulatory filings.

The other bullish case for Nvidia is that it has low valuation multiples despite its strong revenue and profitability growth.

There are several ways to establish whether it is overvalued or a bargain. One of them is to compare its forward price-to-earnings ratio with its historical numbers. In this case, the company has a forward PE ratio of 23, a few points above the S&P 500 Index average of 20.

The company also has a forward PEG ratio of 0.53, lower than the sector median of 1.29 and the five-year average of 1.44.

Indeed, all analysts tracking the company have a bullish outlook. MarketBeat data shows that the consensus target for the stock is $304, representing a 43% surge from the current level. The most optimistic analyst is Tristan Gerra of Baird, who believes that it will jump to $500.

Still, despite all this, the company faces some challenges. One of them is that, as mentioned, competition in the industry is rising, which may affect its business in the future. Also, the shares of top companies it has invested in, like Lumentum, CoreWeave, and Nebius have pulled back sharply lately.

Technical points to a strong rebound in the near term. The most important one is that the stock bottomed out at the 200-day Exponential Moving Average (EMA), which has been an important support level.

Additionally, the stock formed a double-bottom pattern at $191 and has now moved above its upper side at $211. It also formed a bullish flag pattern and is now above the upper side.

Therefore, the path of the least resistance for the stock is bullish, with the next key resistance to watch being the all-time high of $236. Soaring above that price will point to further gains, potentially to the psychological level of $250, followed by $300.

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