By Adam Clark
Nvidia stock could be in line for a long-term boost if Elon Musk's SpaceX makes a successful transition to public markets.
Nvidia shares were up 0.5% at $205.94 in premarket trading Friday. But the stock is down 9.1% over the past month, with investors seemingly wary of competition in artificial-intelligence chips.
SpaceX's initial public offering on Friday could help if the rockets, satellites, and artificial-intelligence company gets off to a good start. SpaceX is a big buyer of Nvidia hardware via its xAI unit and has plans to eventually put data centers in space, likely powered by Nvidia's chips.
Offering access to Nvidia chips is already big business for SpaceX down on Earth. Last week, SpaceX entered into a cloud service agreement with Alphabet's Google, with the search company paying $920 million a month for access to about 110,000 Nvidia graphics-processing units. Meanwhile, Anthropic is paying $1.5 billion a month for access to 325,000 Nvidia GPUs.
SpaceX would like to make it a much bigger business in the future via its plans for orbital data centers, sidestepping the limitations of land and power which are posing increasing obstacles for terrestrial facilities. Some skeptics doubt it will ever be economically viable.
"SpaceX has filed with the FCC for an orbital data-center constellation that could eventually scale to as many as one million satellites. This opportunity remains highly speculative today," said Tejas Dessai, director of thematic Research at Global X. "However, Google's Project Suncatcher analysis suggests that the economics of orbital compute become more plausible if launch costs fall below $200/kg to low Earth orbit by the mid-2030s, down from approximately $1,500/kg today.(")
Nvidia CEO Jensen Huang has been circumspect about Musk's ambitions to put data centers in space, noting the problem of cooling infrastructure in a vacuum when asked in a recent interview. However, Nvidia in March announced a computing module designed for space missions and potential orbital data centers.
"Space computing, the final frontier, has arrived. As we deploy satellite constellations and explore deeper into space, intelligence must live wherever data is generated," Huang said at the time.
Nvidia was a recent Barron's stock pick when shares were trading at around $226.
Write to Adam Clark at adam.clark@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 12, 2026 07:57 ET (11:57 GMT)
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