SpaceX shares closed down about 14% on Wednesday after CEO Elon Musk said the company would exclusively use Nvidia chips for its AI computing. The announcement sent Nvidia stock up roughly 3.4% while AMD shares fell about 6%, despite AMD reporting a record quarter.
Why the market reacted
Musk's decision to make Nvidia the sole supplier for SpaceX's AI needs caught investors off guard. The company had been a major AMD customer, and the sudden switch suggests a deeper strategic alignment with Nvidia. Musk specifically said SpaceX would use Nvidia's Vera Rubin architecture, both on the ground and in space via the Starmind network. That detail — chips in orbit — signals a long-term commitment that goes beyond a typical procurement deal.
The numbers behind the shift
SpaceX's AI unit sales grew 247% year-over-year, and overall revenue rose 92% to $7.8 billion. Adjusted EBITDA hit $3.5 billion. But the company's capital spending reached $18.37 billion in the quarter, with about $15.8 billion going to AI computing. That's a massive outlay — and it's larger than the $14.1 billion of AI cloud sales SpaceX had under contract in the same period. The gap between spending and contracted revenue raises questions about how quickly those investments will pay off.
Lock-up expiration and insider shares
A total of 911.5 million insider shares became eligible to trade on Thursday, increasing the free float from 4.9% to 11.8%. That's a big jump in available stock, and it likely added to the selling pressure. Elon Musk's own stake of roughly 6.4 billion shares remains locked until June 2027, so he can't sell yet. But other early investors and employees now have the option to cash out, which could keep the stock volatile in the near term.
Bearish options and the Vera Rubin architecture
Options market sentiment turned bearish. SpaceX's put-call ratio by volume rose to 1.16 on Wednesday from 0.87 the day before. A ratio above 1 means more puts than calls, a sign traders are hedging or betting on further declines. Meanwhile, Musk's mention of Vera Rubin — Nvidia's next-generation chip architecture — suggests SpaceX is planning for years of exclusive reliance on Nvidia hardware. That's a long bet on one supplier, and it carries its own risks.
The next big date for investors is June 2027, when Musk's shares unlock. Until then, the market will watch whether SpaceX's AI spending starts to generate the revenue needed to close the gap with its cloud sales contracts.
