What Happened?
Shares of leading designer of graphics chips Nvidia (NASDAQ: NVDA) jumped 3.5% in the morning session after SpaceX announced it will exclusively use the chipmaker's hardware for its future artificial intelligence infrastructure, including its ambitious new Starmind orbital compute program.
During SpaceX's first earnings call as a public company, CEO Elon Musk confirmed the strategic partnership, publicly declaring Nvidia’s Vera Rubin architecture as the undisputed best available hardware for complex AI workloads. This exclusive agreement not only secures Nvidia another high-profile, deep-pocketed customer but also proves its massive market expansion beyond traditional terrestrial data centers into next-generation aerospace computing. Reinforcing the bullish outlook, JPMorgan noted that SpaceX alone is expected to absorb a "very significant percentage" of Nvidia's total GPU shipments in 2027. Further signaling the sustained, relentless demand across Nvidia's supply chain, its primary manufacturing partner, Hon Hai Precision Industry Co. (Foxconn), reported a staggering 54.2% increase in monthly sales.
The SpaceX exclusive served as a harsh reality check for Nvidia's primary rival, Advanced Micro Devices (NASDAQ: AMD). AMD shares sank over 6% as the growing competitive gap with Nvidia became increasingly apparent. Although AMD topped its second-quarter earnings estimates, the company issued softer-than-expected revenue forecasts and announced increased capital expenditures that spooked investors. The combination of AMD's muted outlook and Nvidia's high-profile SpaceX win highlights how Nvidia continues to aggressively capture the lion's share of the booming AI infrastructure market.
The shares were trading at $219.32, up 3.7% from the previous close.
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What Is The Market Telling Us
Nvidia’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 22 days ago when the stock gained 4% on the news that Morgan Stanley reiterated its "overweight" rating on the stock, and a U.S. official confirmed the company has begun shipping its powerful H200 AI chips to China. The investment bank highlighted that Nvidia remains its top semiconductor pick, with management describing "accelerating growth rates" even as revenue nears $100 billion per quarter. Separately, a top U.S. commerce official told Congress that while the number of H200 chips shipped to China so far was "very few," the shipments have commenced. The stock's advance was also supported by a general rebound among semiconductor companies following a cooler-than-expected June inflation report as a surprise capital expenditure warning from IBM appeared to validate AI hardware demand. June core CPI printed flat month-over-month (2.6% year-over-year versus a 2.9% forecast), reopening the door to a friendlier interest rate environment. The soft inflation print lowers the discount rate, which benefits high-multiple semiconductor valuations.
Nvidia is up 16.1% since the beginning of the year, and at $219.32 per share, it is trading close to its 52-week high of $235.74 from May 2026. Investors who bought $1,000 worth of Nvidia’s shares 5 years ago would now be looking at an investment worth $10,627.
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