Nvidia's Huge Stake in SpaceX Brings Volatility Risk

Nvidia's $21 billion investment in SpaceX has raised concerns about its potential impact on the company's earnings. As one of Nvidia's largest holdings, alongside a $30 billion stake in Intel, the tech firm is indirectly exposed to the volatile space stock.

This exposure may introduce volatility into Nvidia's earnings due to potential investment gains and losses. In its most recent earnings results, Nvidia reported other income totaling $15.9 billion, primarily attributable to unrealized gains and losses on investments.

Nvidia notes that this other income gave its bottom line a boost of about 30%. However, with SpaceX stock struggling after June, the company may incur a loss from its investments when it reports its next round of earnings.

While Nvidia's exposure to SpaceX and other volatile stocks may not adversely affect its core business, which still generates substantial earnings, investors will be watching closely for any signs of impact on future performance.