SpaceX has a huge opportunity as it expands its compute power and gets strong payback periods.
Nvidia is getting a massive amount of high-margin revenue per 1 gigawatt of compute capacity.
Nvidia (NASDAQ: NVDA) and Space Exploration Technologies (NASDAQ: SPCX) are two of the most exciting artificial intelligence (AI) stocks, and with SpaceX deciding to build its data centers exclusively on Nvidia's Vera Rubin platform, the two companies are inextricably linked. With $10,000 split between the two stocks, investors could buy 34 shares of SpaceX and 23 shares of Nvidia.
With SpaceX set to ramp up its compute capacity to levels never seen before, a $10,000 investment split between the two stocks could be worth over $52,000 by the end of 2030. Here's how.
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SpaceX has seen some of the best returns on its AI infrastructure investments, with a payback breakeven in about a year. Meanwhile, CEO Elon Musk thinks the company can push that down to around six months.
With that type of return profile, SpaceX is set to embark on one of the largest AI infrastructure investments ever seen. Musk said the company plans to end this year with up to 3 gigawatts of computing power and end 2027 with at least 13 gigawatts. Meanwhile, it has a long-shot goal of adding up to an incremental 20 gigawatts of computing capacity next year.
One gigawatt of power costs approximately $50 billion to build on Nvidia's Vera Rubin platform, so SpaceX is looking to spend at least $500 billion in capital expenditures (capex) next year on AI infrastructure, with the potential to spend up to $1 trillion. Meanwhile, Musk has projected that this could help SpaceX end 2027 with between $500 billion and $1 trillion in annual recurring revenue (ARR).
Now, let's say SpaceX adds 10 gigawatts of compute capacity each of the next five years; that would give the company 53 gigawatts of computing power at the end of 2031. Assuming similar revenue per gigawatt, that would be a year-end 2031 ARR of around $2.65 trillion. Throw in SpaceX's Starlink, increased rocket launches, and AI coding growth, and it could hit $3 trillion in revenue in 2031.
| Metric | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 |
|---|---|---|---|---|---|---|
| Compute capacity | 3 GW | 13 GW | 23 GW | 33 GW | 43 GW | 53 GW |
| AI infrastructure ARR | $150 billion | $650 billion | $1.15 trillion | $1.65 trillion | $2.15 trillion | $2.65 trillion |
| Shares | 13.6 billion | 15 billion | 16.3 billion | 17.6 billion | 18.8 billion | 20 billion |
Calculations by author.
Place a 5 times price-to-sales (P/S) multiple on the stock, and it would be worth $15 trillion. However, all this capex will lead to a higher share count, which we'll assume will be diluted by 10% in 2027, gradually stepping down by 1% a year. This would lead to a $750 share price, and those 34 shares would be worth $25,500 by the end of 2030.
Nvidia gets roughly $40 billion per gigawatt in revenue from its Vera Rubin architecture. This comes not only from its graphics processing units (GPUs), but also from its networking components, other chips -- such as central processing units (CPUs) and inference language processing units (LPUs) -- and its expanding software layer that goes into the configuration of its Vera Rubin NVL72 rack-scale supercomputing platform.
As such, if SpaceX adds 10 gigawatts of power a year, it would equate to around $400 billion in annual revenue just from one customer. However, Nvidia obviously has a lot of customers and has been growing rapidly. Nvidia has also been able to get more revenue per gigawatt with each new generation of its architecture, going from approximately $18 billion for Hopper to $25 billion for Grace Blackwell, and now $40 billion with Vera Rubin. There is good reason to believe this will continue.
As such, I think Nvidia's current analyst estimates will likely prove too low. If Nvidia can sell more Vera Rubin systems to SpaceX without missing out on selling capacity to other customers, its fiscal 2028 revenue could be closer to $850 billion. That would take my model to the company generating adjusted earnings per share (EPS) of nearly $61 in fiscal 2032 (ending January).
Below are my projections:
|
Metric |
FY2027 |
FY2028 |
FY2029 |
FY2030 | FY2031 | FY2032 |
|---|---|---|---|---|---|---|
|
Revenue |
$412 billion |
$850 billion |
$1.28 trillion |
$1.79 trillion | $2.32 trillion | $2.79 trillion |
|
Revenue growth |
90% |
106% |
50% |
40% | 30% | $20% |
|
Gross profit |
$309 billion |
$629 billion |
$931 billion |
$1.29 trillion | $1.62 trillion | $1.95 trillion |
|
Adjusted operating expense |
$35 billion |
$53 billion |
$81 billion |
$123 billion | $186 billion | $257 billion |
|
Operating income |
$274 billion |
$576 billion |
$850 billion |
$1.16 trillion | $1.44 trillion | $1.69 trillion |
|
Net income |
$233 billion |
$489 billion |
$722 billion |
$988 billion | $1.22 trillion | $1.44 trillion |
|
EPS |
$9.66 |
$20.72 |
$30.59 |
$41.84 | $51.75 | $60.90 |
Calculations by author. FY = Fiscal year.
Place a 19 times forward P/E on that, which is a current S&P 500 market multiple, and the stock would be worth $1,160 by the end of 2030. Meanwhile, those 23 shares would be worth roughly $26,650.
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Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.