NVDA Stock Bucks Selloff Premarket On SpaceX Boost, Foxconn’s Sales Update

• Elon Musk said SpaceX will build its AI infrastructure exclusively on Nvidia chips going forward.
• Nvidia’s manufacturing partner, Hon Hai Precision Industry Co., reported a 54.2% increase in July sales, signaling sustained demand for global AI infrastructure buildout.
• Retail sentiment for NVDA shifted to ‘bullish’ from ‘neutral', amid ‘high’ message volume.

Nvidia Corp.’s stock rose nearly 2% in early premarket trading on Wednesday, bucking a selloff in the broader market and chipmakers, after SpaceX picked the chipmaker as its exclusive supplier of AI chips.

CEO Elon Musk said SpaceX will build its AI infrastructure exclusively on Nvidia chips going forward.

“Going forward, we’ve decided to build exclusively on Nvidia, because we think the Vera Rubin architecture is the best architecture. We think it’s the best AI computer, and we greatly value our close cooperation and partnership on many levels with Nvidia. We’re exclusive to Nvidia,” Musk said in SpaceX’s analyst call.

If NVDA’s move holds in Wednesday’s regular session, it would be the fifth straight day of gains for the stock. Shares of AMD, SpaceX’s current chip supplier, fell 8% in premarket.

Morningstar said the agreement could represent a retreat from plans to manufacture chips with Tesla through Terafab. Public documents released in May estimated that Terafab’s first phase would cost at least $55 billion, with a full buildout potentially reaching $119 billion. Intel joined the project in April, while Musk previously said SpaceX would lead its initial scaled-up phase.

Foxconn’s July Update

Meanwhile, Nvidia’s manufacturing partner, Hon Hai Precision Industry Co., reported a 54.2% increase in monthly sales, signaling sustained demand in global AI infrastructure buildout by customers.

Revenue for July climbed to NT$946.5 billion ($29.3 billion), Hon Hai said Wednesday in a statement. Analysts on average are looking for a 31.2% increase in sales for the three-month period ending in September.

The Nvidia server assembly partner said shipments of AI racks are expected to maintain momentum in the current quarter, while demand for information and communications technology products is entering peak season.

Hon Hai, also known as Foxconn, booked a bigger-than-expected 40% jump in its revenue in the April-June period and has established itself as a key AI hardware player by assembling servers that house Nvidia accelerators.

Retail View On NVDA

On Stocktwits, the retail sentiment for NVDA shifted to ‘bullish’ from ‘neutral', amid ‘high’ message volume.

“$NVDA hopefully the rotation from AMD back into NVDA is starting,” a trader said. As of their last close, NVDA shares are up 13% year to date.

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