SpaceX Expects to Spend $35 Billion to $40 Billion This Quarter. Here's Who Sells the Power and Cooling.
Key Points
GE Vernova and its peers are providing the turbines for SpaceX’s Starbase.
Trane and Vertiv could provide the cooling equipment for its data centers.
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SpaceX (NASDAQ: SPCX) recently closed a $40 billion debt offering to fund its purchases of new GPUs from Nvidia (NASDAQ: NVDA). It also plans to spend $35 billion to $40 billion in the fourth quarter alone. That's roughly double its capex of $19.6 billion in the third quarter.
SpaceX's spending spree isn't surprising, since its founder and CEO, Elon Musk, believes it will become the first company to generate $1 trillion in annual revenue by 2030. That would represent a 113% CAGR from its projected 2026 revenue. It plans to achieve that goal by expanding Starlink, launching more Starship rockets, and strengthening its AI ecosystem.
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For now, most of that spending will flow to Nvidia. However, SpaceX's data centers also need to power and cool those cutting-edge chips. Let's take a look at the power producers and cooling equipment manufacturers that will benefit the most from SpaceX's relationship with Nvidia.
Who will power SpaceX's data centers?
The biggest direct beneficiary of SpaceX's data center plans is the Arizona Electric Power Cooperative (AEPCO), which will provide electricity to its Cochise County campus in Arizona. However, AEPCO is a non-profit cooperative and isn't publicly traded.
In Texas, SpaceX is building its own gas-fired plant at Starbase to power its own data centers rather than relying on ERCOT, the state's power grid. That strategy will cut regional power providers -- such as Vistra and NRG Energy -- out of the loop.
Therefore, it's smarter to invest in the companies that actually produce the components for Starbase's temporary and permanent configurations. Its temporary configuration will get it up and running as quickly as possible, while its permanent configuration will eventually replace it.
GE Vernova (NYSE: GEV) will provide eight 7E gas turbines for Starbase's permanent configuration. Caterpillar's (NYSE: CAT) subsidiary, Solar Turbines, is supplying 18 SMT-130 turbines for Starbase's temporary 35-turbine configuration. Mitsubishi Heavy Industries (OTC: MHVIY) is providing nine FT8 turbines for its temporary configuration.
These deals with SpaceX account for only a small percentage of their overall sales, but all three companies should benefit from the broader growth of the power-hungry data center market.
Over their next three fiscal years, analysts expect GE Vernova, Caterpillar, and Mitsubishi Heavy Industries to grow their revenues at CAGRs of 17%, 13%, and 11%, respectively. GE Vernova is the best all-around play on electric grids and utilities, Caterpillar is the leader in on-site power solutions for data centers, and Mitsubishi is a larger-scale power generation play.
Who will cool SpaceX's power plants and data centers?
Once SpaceX installs Nvidia's top-tier data center GPUs, it will need to cool them down to keep them running. The top providers of that equipment include Trane (NYSE: TT), a leader in commercial HVAC systems and industrial chillers, and Vertiv (NYSE: VRT), which sells thermal management, liquid cooling, and uninterruptible power supply (UPS) systems for data centers.
Neither company has publicly announced any deals with SpaceX, but they'll likely be the top choices for cooling its data centers. Both companies have already benefited from the rapid growth of the data center market over the past few years, and analysts expect that momentum to continue for the foreseeable future. From 2025 to 2028, analysts expect Trane's revenue to grow at an 11% CAGR, and for Vertiv's revenue to increase at a 33% CAGR.
Why are electrification and cooling stocks safer AI plays than others?
Electrification and cooling companies aren't growing as rapidly as AI chipmakers or AI infrastructure companies, but they're still linchpins of the booming AI market.
SpaceX and other data center builders might face near-term pressure from cautious regulators, but long-term demand for more power and more efficient cooling solutions should continue to drive stocks like GE Vernova, Trane, and Vertiv higher over the next decade.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Caterpillar, GE Vernova, NRG Energy, Nvidia, Space Exploration Technologies, Trane Technologies Plc, Vertiv, and Vistra. The Motley Fool has a disclosure policy.
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