SpaceX (NASDAQ:SPCX) is reportedly preparing to borrow about $40 billion to buy Nvidia Corp. (NASDAQ:NVDA) chips. Yorkville Ives analyst Dan Ives says Starlink can help pay for it.
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SpaceX is seeking the money through a financing led by Apollo Global Management Inc. (NYSE:APO), the Financial Times reported Tuesday. The package would include roughly $10 billion of bank loans and $30 billion of investment-grade debt.
Inside the Deal
In a Wednesday research note, Ives said Pacific Investment Management Co. is among the lenders in talks and the deal is expected to close in 2027. The talks are still early, and SpaceX hasn’t confirmed them, so terms could change.
If finalized, the deal would rank among the largest financings ever raised for AI infrastructure. It would also deepen existing ties. Apollo backed two Nvidia-cluster deals for xAI earlier this year, each worth about $3.5 billion, according to Ives. Nvidia owns a SpaceX stake valued at close to $21 billion.
CEO Elon Musk has called Nvidia SpaceX’s “exclusive” partner for its AI infrastructure buildout, and Ives said the chip count at Colossus 2 is on track to more than double by December.
Why Debt Works
Ives called the financing “a smart strategic move.” He argues that launch, Starlink and AI feed one another, with each business cutting costs or lifting demand for the other two. He expects AI to drive the next leg of growth as contracted cloud capacity turns into revenue.
“In this AI Arms Race it’s clear Musk needs to move quickly and this move will be received well by investors given the cloud data AI buildout on the horizon for SpaceX,” Ives wrote.
In his view, supply is the bottleneck, not demand. Borrowing to lock in chips lets SpaceX avoid going back to the equity market just four months after its June IPO. The capacity is being contracted before delivery and starts earning once it’s switched on.
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The Leverage Question
Ives acknowledged the debate over a newly public company carrying this much debt. He isn’t worried.
“We think the contracted backlog in AI and the cash generation of Starlink give SpaceX the capacity to service it, and we would rather see this compute financed and deployed than deferred,” he wrote.
He kept his Outperform rating and $225 price target. The $40 billion raise equals less than 2% of SpaceX’s roughly $2.21 trillion market value.
SPCX Price Action
SPCX Stock Price Activity: SpaceX shares were down 2.46% at $167.69 at the time of publication Wednesday, according to Benzinga Pro market data. Ives’ target is close to the stock’s 52-week high of $225.64 and implies about 34% upside.
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