Nvidia (NASDAQ:NVDA) shares edged higher in premarket trading on Friday, August 7, 2026, following news that SpaceX (NASDAQ:SPCX) has chosen the company as its sole provider for AI infrastructure. The stock rose 0.4% to $219.90 as of 04:29 EDT, building on a week that has seen significant gains.
The endorsement from SpaceX, led by CEO Elon Musk, was revealed in a Wall Street Journal report. Musk stated, “We think the Vera Rubin architecture is the best architecture,” and confirmed, “We’re exclusive to Nvidia.” The decision underscores Nvidia's dominance in the AI chip market, even as SpaceX prepares for substantial investments in AI infrastructure.
While the contract's financial terms were not disclosed, the strategic significance was not lost on investors. Nvidia's stock has surged 9.1% over the week, nearly mirroring an 8.7% increase in earnings estimates for fiscal 2027. This alignment suggests that the rally is supported by improved profit outlooks, not just speculative momentum.
According to Reuters calculations, Nvidia's market capitalization swelled by approximately $176 billion on Wednesday alone, while AMD (NASDAQ:AMD) saw its value drop by nearly $59 billion. The net effect was a $235 billion swing in relative valuation between the two chipmakers, highlighting the market's preference for Nvidia's growth trajectory.
AMD reported a robust quarter, with data-center revenue more than doubling to $6.72 billion and third-quarter sales guidance of $13 billion, surpassing analyst expectations. However, despite these strong fundamentals, AMD trades at a higher valuation multiple of 32.3 times projected fiscal 2027 earnings, compared to Nvidia's 24.3 times. This gap suggests that investors are willing to pay a premium for AMD's growth potential, but Nvidia's endorsement from SpaceX reinforces its competitive edge.
Nvidia's core financials remain solid. The company reported first-quarter revenue of $81.6 billion, an 85% year-over-year increase, with data-center revenue climbing 92% to $75.2 billion. For the second quarter, Nvidia projects revenue of $91 billion, plus or minus 2%. Analysts are forecasting earnings of $2.08 per share for the quarter, a figure that has held steady over the past month and is up from $1.93 three months ago.
The upcoming earnings report on August 26 will be a critical test. Investors will be watching for updates on Rubin shipment schedules, data-center expansion plans, and gross margin trends. The SpaceX endorsement has raised expectations, but execution risks remain.
Wall Street sentiment is overwhelmingly bullish. Nvidia's median price target is $300, implying a 37% upside from Thursday's close, though the lowest target of $180 suggests a possible 18% downside. The wide range reflects uncertainty about the sustainability of AI-driven growth.
Risks loom on the horizon. Anthropic announced on Wednesday that it has formed an internal custom-chip team, signaling a potential shift in the AI hardware landscape. While the company continues to use Nvidia and AMD chips, a faster adoption of custom silicon could erode Nvidia's pricing power over the long term.
For now, Nvidia's leadership in AI infrastructure appears unchallenged, but the market's reaction to the SpaceX news suggests that investors are betting on continued dominance. As the August 26 earnings date approaches, all eyes will be on Nvidia's ability to deliver on its promises.
