Quick overview

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Elon Musk announced an exclusive partnership with Nvidia to supply compute infrastructure, coinciding with a heavy sell-off in SpaceX stock driven by massive AI capital expenditures and an impending employee/insider stock lock-up expiration.

The drop in SpaceX shares coincides with the expiration of its post-IPO lock-up window, allowing early investors and employees to sell down up to 20% of their restricted holdings.

Nvidia (NVDA) gained ~3.7% as the market priced in tens of billions in exclusive future chip orders. SpaceX (SPCX) dropped over 7% intraday as heavy insider supply merged with investor anxiety over runaway AI infrastructure costs. AMD dropped over 6% due to losing its position in SpaceX’s hardware stack.

 Musk declared that SpaceX will construct its entire terrestrial and orbital AI infrastructure exclusively using Nvidia’s Vera Rubin architecture. This severed prior chip supply relationships with rivals like AMD. The partnership powers SpaceX’s new “Starmind” project—an orbital network of compute satellites housing Nvidia Rubin GPUs and Vera CPUs to run data-center-grade processing directly in space. SpaceX targets expanding compute capacity to over 2 gigawatts by late 2026, scaling toward 10–20 gigawatts in subsequent years.

Earnings Beat vs. Capital Expenditure Surge

SpaceX reported Q2 revenue of $7.81 billion (up 92% YoY, beating the $6.82B consensus), with Starlink driving $4.29 billion. However, the company posted a net loss of $541 million. Total capital expenditures for the quarter hit $18.37 billion, with $15.8 billion (86%) directed into AI build-outs. This massive spending sparked immediate free cash flow concerns among investors.