Musk's Moonshot Could Send NVIDIA to $500, But Also Crack the Stock
NVIDIA's stock has been on a wild ride lately, trading in a range where risk and reward are closely balanced. The chip giant sits at the intersection of a massive capital cycle in tech history and a growing debate over whether that movement is starting to look like a bubble.
The company designs accelerated computing platforms for frontier AI models and has seen its Data Center segment grow to 92% of total revenue. Its customer list reads like a who's who of hyperscale AI, including Meta, OpenAI, Google Cloud, Microsoft, Oracle, Anthropic, and xAI.
Elon Musk's announcement that SpaceX will scale data center capacity from 1.4 gigawatts to 10 gigawatts by year-end 2027 could push NVIDIA toward a $500 share price. Research firm SemiAnalysis estimates the buildout at $50 billion per gigawatt annually, or $300 billion to $500 billion in 2027 capital spending alone.
NVIDIA has already announced a $500 billion financing partnership with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR to underwrite AI factory buildouts. Adding even $150 billion to $200 billion in incremental SpaceX orders onto NVIDIA's accelerating trajectory makes the path to a $500 share price a math problem.
However, this moonshot could also crack the stock. A single customer proposing capex on par with AWS and Google combined at a company far less profitable than either is exactly the kind of concentration risk bears have salivated over.