NVIDIA, Alphabet Emerge as Top Beneficiaries of Orbital Chip Market
NVIDIA and Alphabet have emerged as top beneficiaries of the growing orbital chip market. Google's Project Suncatcher aims to test its proprietary Tensor Processing Units (TPUs) in Low Earth Orbit, potentially controlling both the compute infrastructure and AI workloads.
NVIDIA, on the other hand, has been named the exclusive chip supplier for SpaceX's orbital data center ambitions, which could scale to one million compute satellites. This deal is architecturally simple: swap Starlink comms hardware for NVIDIA's computing hardware, add solar panels, and let orbital physics handle the rest.
NVIDIA holds a sizable stake in SpaceX, aligning shareholder interests and ensuring that any buildout will flow directly into fresh GPU demand on top of an already insatiable earthbound order book. The company's 92.9% return on invested capital (ROIC) proves it converts every dollar of space-or-earth demand into strong returns.
The bull case for NVIDIA is clear: exclusive chip designation, a deep SpaceX relationship, and a 29.3% fair value upside at current prices. Meanwhile, Google's TPU angle is structurally different and cleverly hedged, aiming to own the full compute stack if space-based AI takes off.