Space exploration technologies (NASDAQ: SPCX) just reported fabulous earnings, with a 161% increase in revenue and net income of $4.4 billion, its first quarterly profit.
Elon Musk shared some exciting news about where the company is heading, including perfecting reusable spacecraft and increasing satellite bandwidth 100-fold. But he also gave fabulous news for Nvidia (NASDAQ: NVDA) investors.
Did you miss “Act 1” of AI? Act 2 could be 14 times bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1,” the R&D phase. “Act 2” is the global rollout. Continue “
Running on Rubins
The highlight of the report was the artificial intelligence (AI) sector, now called SI, or Super Intelligence. Sales grew 835% year-over-year, driven by compute deals, the acquisition of coding company Cursor and enterprise adoption of the Grok AI model. It also became profitable, with $431 million in operating income.
Musk bragged about taking the same team that made SpaceX’s rocket business so dominant and tasking it with deploying AI computing infrastructure, comparing it to the “New York Yankees playing Little League” and calling it “not fair” to the competition.
The company leases the computing power of its massive Colossus I data center cluster and has agreements with Alphabet and Anthropic for $920 million and $1.2 billion in monthly revenue, respectively. Colossus II is currently under construction, and Musk said it will primarily feature Nvidia’s Vera Rubin chip infrastructure.
He also said that SI plans to “have the most powerful online training cluster” by the second quarter and that to that end it will need “440,000 Vera Rubin computers deployed for optimal training.” Grok is growing rapidly, with accelerating usage, and SpaceX is scaling it for businesses. Musk sees them using Grok Bot, his AI agent, in roles as if it were a human agent. “I’ve never seen anything grow this fast,” he said, and he expects Grok Bot to be the primary user of the additional compute.
The race for a trillion dollars
Musk believes SpaceX could generate between $500 billion and $1 trillion in annual recurring revenue (ARR) by the end of 2027. If so, that would make it one of the largest companies in the world by sales.
Nvidia CEO Jensen Huang has forecast $1 trillion in revenue through 2027 for the Blackwell and Rubin lines alone, and CFO Collette Kress said the company expects sales to grow 70% next year, even if that happens in a climate of limited supply. Wall Street expects Nvidia’s sales to reach $692 billion next year, an increase of 68%.
Gn bussni
