The Mixed Blessing From Tech Earnings Weighing on Nvidia Stock

Tesla CEO Elon Musk has praised Nvidia CEO Jensen Huang and said he would exclusively use the chip maker’s hardware for artificial-intelligence processing. (Photo by Win McNamee/Getty Images)

Key Points

Nvidia shares fell 7.8% over the past month, leaving the chip maker practically tied with Apple in terms of market value.
Elon Musk said SpaceX closed a $40 billion debt deal to purchase graphics-processing units.
Musk has previously stated that SpaceX would exclusively use Nvidia chips to power its artificial-intelligence business.

Nvidia is struggling to hold on to its title as the world’s largest company by valuation and investors are falling out of love with the artificial-intelligence trade. But Elon Musk’s big AI chip purchases provide some good news to offset the gloom.

Nvidia shares were up 0.4% at $211.69 in premarket trading. The stock is down 7.8% over the past month, leaving the chip practically tied with Apple in terms of market value.

Technology earnings season is proving a mixed blessing for Nvidia as big spending commitments—which should be a boon for the semiconductor industry—provoke concerns about the sustainability of the AI boom.

But one man who doesn’t seem too concerned is Tesla and SpaceX CEO Musk. He said Sunday that SpaceX has closed a $40 billion debt deal to purchase graphics-processing units, in a post on social-media site X. That should be flowing to Nvidia — Musk has previously said SpaceX would exclusively use Nvidia’s chips to power its AI business.

It’s not a totally new commitment. SpaceX’s debt financing had been previously reported and Musk set out plans for SpaceX’s xAI business to have as many as 1.44 million Nvidia chips at its Memphis Colossus data-center complex before the end of the year. Still, it comes at handy time to provide reassurance that Nvidia’s hardware is still seen as a good investment for both major companies and their lenders.

Write to Adam Clark at adam.clark@barrons.com

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