Nvidia (NASDAQ:NVDA) experienced a historic week as its market capitalization surged by $562 billion, driven by SpaceX's announcement that it would exclusively use Nvidia's AI hardware. The stock closed Friday at $223.96, up 11.6% for the week and 2.27% on the day, marking its strongest weekly performance since May 2025.
The catalyst came from SpaceX (NASDAQ:SPCX), which revealed it had selected Nvidia as its sole provider for future AI systems. CEO Elon Musk stated the company had "decided to build exclusively on Nvidia," praising Vera Rubin as the best AI architecture. This endorsement sent a powerful signal to investors about Nvidia's competitive position in the AI chip market.
The $562 billion increase in market value is particularly striking, representing 6.2 times Nvidia's quarterly revenue forecast of $91 billion. This suggests investors are pricing in long-term resilience rather than just immediate sales. By Friday's close, Nvidia's market capitalization stood near $5.42 trillion, with shares trading at 34.3 times trailing earnings.
Nvidia's weekly gain outpaced the broader tech sector significantly. The PHLX Semiconductor Index rose 9.25%, the Nasdaq Composite gained 5.19%, and the S&P 500 advanced 3.58%. Nvidia's outperformance of 6.4 percentage points over the Nasdaq and 2.35 points over the chip index served as the primary signal to investors for the week.
The SpaceX endorsement also weakened the competitive position of Advanced Micro Devices (NASDAQ:AMD), which posted data-center revenue of $6.72 billion, more than double the previous year's figure. Despite this strong performance, AMD shares declined 6.6% on Wednesday as investors sought even larger AI-driven gains. Bernstein analyst Stacy Rasgon noted that buyers maintained a "fairly bullish outlook" on the sector.
Nvidia's upcoming earnings report on August 26 will be a critical test. The company has guided for fiscal second-quarter revenue of $91 billion, plus or minus 2%, which would represent a 94.7% year-over-year increase. Analysts surveyed by FactSet expect non-GAAP earnings per share of $2.08, up from $1.05 in the prior year. Non-GAAP gross margin is projected at 75.0%, compared to 72.7% a year ago.
Wall Street remains overwhelmingly bullish on Nvidia, with 61 of 64 analyst calls rated Buy or Overweight. The average price target stands at $314.29, implying roughly 40% upside from Friday's close. Even the lowest target of $180 suggests only about 20% downside.
Investors will also be watching macroeconomic data this week, including July consumer inflation due Wednesday and producer prices on Thursday. Applied Materials (NASDAQ:AMAT) is scheduled to report earnings after the close Thursday, providing additional insight into chip demand.
Nvidia's guidance excludes any data-center compute sales from China, a revenue stream influenced by export regulations. Supply constraints and potential delays with Rubin could also impact results. The company's high valuation offers limited tolerance for any slowdown in AI investment, as AMD's recent drop demonstrates how robust performance can quickly lead to disappointment.
