Musk said SpaceX could lease its computer “multiple times,” speaking of relentless customer demand and difficulty finding available capacity.
ARK analyst Brett Winton pointed to the increase in contract renewals as bullish for vendors able to deploy GPUs quickly.
Musk predicted 13 GW of computing by the end of 2027, above ARK’s forecast of less than 8 GW.
CoreWeave (CRWV), Nebius (NBIS) and major AI infrastructure stocks climbed overnight Tuesday, as strong demand for compute from SpaceX prompted analysts to dispute fears of oversupply and point to rising leasing rates and faster-than-expected capacity expansion.
CRWV rose 5% and NBIS climbed 6% overnight, while Nvidia (NVDA) and ASML (ASML) each gained 2% and Intel (INTC) advanced 4%.
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SpaceX Computing Demand Exceeds Supply
“Frankly, we’re also being relentlessly harassed by all the hyperscalers and dozens of small companies to lease more of our computers,” Musk said during SpaceX’s latest earnings call. “We could rent our computer multiple times if we said yes to everyone.”
SpaceX itself faced the shortage. Musk said efforts to move inference workloads elsewhere and free up capacity for training hit the same wall on the GB300, GB200, TPU, Trainium and older H100s: no availability. He compared the research to the sketch of Monty Python’s cheese shop: a shop with many varieties to ask for, but no cheese to sell. “It’s ridiculous. I don’t think we’re going to have a demand problem here,” Musk said.
The strong demand outlook has boosted shares of AI cloud providers such as CoreWeave and Nebius, which lease GPU computing capacity to their customers.
SpaceX’s Compute Outlook Gives Fodder to Neocloud Bulls
Gene Munster, managing partner of Deepwater Asset Management, said SpaceX’s Super Intelligence business beat expectations by 17%, calling the results good news for neoclouds. “This is profitable revenue and a sign that the narrative that we have a computational oversupply is off the table,” he said.
The segment generated $7.6 billion in revenue in the third quarter (Q3), or about 52% of SpaceX’s $14.6 billion total, up from 33% in the June quarter, Munster noted. Chief Financial Officer Bret Johnsen said IS solutions and infrastructure revenue grew 192% sequentially, even excluding the Cursor acquisition.
Munster also said investors are underestimating the business that helps fund SpaceX’s connectivity and launch ambitions. “The super intelligence (computing) sector doesn’t get the love it deserves from many investors because it’s not considered as sexy as other segments,” he said.
ARK sees a bullish signature in the renewal of compute contracts
Musk said the shortage was supporting prices, even for older hardware. “That’s why you see even old computers, like H100s, renting for a higher price than when they were new,” he said.
SpaceX favors short contracts over spot market rates, betting that better AI software will increase the value generated by its calculation. “We’re seeing them renew at higher dollars per watt, not lower dollars per watt,” Musk said.
Brett Winton, chief futurist of ARK Investment Management at Cathie Wood, highlighted the implications for providers able to quickly activate their capacity. “Elon’s comment also suggests that renewals on the same chips are increasing year over year,” he said. “This is optimistic for anyone who can actually connect a GPU to power in as little time as possible.”
Johnsen said prices were slightly higher than the $30 to $30 per watt range discussed previously, with new deployments paying for themselves in less than a year. Winton said contracts above $50 billion per gigawatt exceeded ARK’s model, while noting potential customer concentration.
Musk suggested that yields could improve further: “I’m not saying that will happen; it’s not impossible that we have a six-month payback period for the calculation next year.”
SpaceX capacity plans exceed ARK forecasts
SpaceX ended September with 1.7 gigawatts of nominal computing capacity and expects 2.5 to 3 GW by the end of the year. Musk said he was very confident about adding another 10 GW in 2027. “I would be surprised if we produced less than 13 gigawatts of computing by the end of next year,” he said.
This exceeds ARK’s forecast by just under 8 GW, Winton said. Reaching 3 GW this year would also exceed expectations of 2.1 GW, he noted. “It’s pretty positive,” Winton said. “At the margins, I was somewhat expecting some edifying comments on the GWs delivered given the complications on the ground.”
Musk also highlighted his goal of 20 GW of additional power and cooling infrastructure next year, while presenting more than 20 GW of active computing in 2027 as a smaller possibility. Winton said separately that reaching 20 GW of computing by the end of 2028 could provide a credible catch-up path for pioneering AI competitors; ARK had planned this step towards the beginning of 2030.
The expansion comes after capital spending of $19.6 billion in the third quarter. Munster said the plans suggested 2027 spending above the Street’s expectations of $162 billion.
Niles: SpaceX could help spark the next AI rally
Niles Investment Management founder Dan Niles pointed to SpaceX’s rising profits and prospects for aggressive spending as reasons for growing confidence in a near-term AI rebound. “My belief in a near-term AI rally continues to grow,” he said on X.
SpaceX is forecasting revenue of $33 billion to $37 billion for the first quarter and capital spending of $35 billion to $40 billion for the fourth quarter. Niles placed those prospects at 57% and nearly 90% above consensus, respectively.
He argued that the AI infrastructure trade seemed oversold, even recognizing the neocloud’s financing challenges, slowing revenue growth from OpenAI and Anthropic, and bipartisan opposition to data centers. “Perhaps SpaceX earnings and Super Micro’s positive advance announcement (preliminary Q1 sales update) today are the trigger for the next AI-related rally, whether we’ve seen THE TOP or not.”
SpaceX’s chip ambitions put suppliers in the spotlight
Musk said SpaceX plans to bring 200,000 Nvidia GB300s online per month through the end of the year, with next year’s deployments increasingly focused on Vera Rubin. A training cluster would contain 440,000 Vera Rubin computers by the end of the second quarter of 2027.
Winton said SpaceX’s ability to quickly power and deploy chips makes it a more reliable Nvidia customer. Musk identified power, cooling and infrastructure as more important constraints than chips.
Intel and ASML connect via Terafab. Intel is a strategic partner in the project, which Musk said is targeting a functional test chip around May or June 2027 and volume production in the second half of 2028.
“Now these are very aggressive dates, and we are very grateful to ASML and all of our other suppliers for expediting equipment deliveries in order to achieve this outcome,” Musk said, while cautioning that the timeline carried considerable uncertainty.
Grok Bot adds fuel to SpaceX’s compute extension
Musk said Grok Bot could eventually use most of SpaceX’s calculations, adding another source of demand alongside external customers. “I’ve never seen anything grow this fast,” he said.
President and COO Gwynne Shotwell said Grok Bot reached 800,000 paid weekly users earlier this month, more than double the month before. Munster forecasts 50 million daily users within six months, compared to 5 million currently.
Musk linked the expansion to potential annual recurring revenue of $500 billion to $1 trillion by the end of 2027. Winton said the high end represented an advantage related to monetizing Grok Bot rather than just leasing infrastructure. “There is no need to make wild assumptions about AI software monetization for this ARR forecast to work,” he said.
What do retail traders think of AI infrastructure stocks?
On Stocktwits, CRWV and NBIS saw “extremely bullish” retail sentiment amid “extremely high” message volume, while INTC and NVDA saw “bullish” sentiment on “normal” volume. ASML sentiment was “neutral,” even amid “normal” message volume.
INTC leads the group with a gain of 148% so far this year, followed by NBIS at 105%, ASML at 53% and NVDA at 16%, while CRWV fell 13%.
For updates and corrections, email newsroom(at)stocktwits(dot)com.
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Deepti Sri has no position in any of the stocks mentioned in this article. Content from the StockTwits News Team is for informational purposes only and is not intended as investment advice. To learn more, see our editorial policy. This article was originally published on StockTwits.
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