Nvidia Poised to Gain from SpaceX's $15.8 Billion AI Spend

SpaceX's massive investment in artificial intelligence (AI) is likely to benefit chipmaker Nvidia significantly, according to CEO Elon Musk. On a recent earnings call, Musk praised Nvidia's Vera Rubin architecture as the 'best AI computer,' stating that SpaceX will rely exclusively on it for its AI build-out.

The company's capex on AI during the past three months totaled $15.8 billion, more than doubling from the March quarter's $7.7 billion. This represents 86% of its expenditures last quarter. With two gigawatts of compute capacity expected this year and potentially rising to 10 gigawatts by next year, SpaceX stands to generate significant revenue from AI-related services.

However, despite the growth potential, Nvidia remains a safer investment option due to its more reasonable valuation based on earnings rather than hype. The company is highly profitable and growing rapidly, making it an attractive choice for investors looking to benefit from the increased demand for AI technology.