Nvidia’s leading position in the AI chip field remains solid, and Musk’s public endorsement and SpaceX’s exclusive procurement plan further confirm its technological advantages. Despite its market value approaching $6 trillion, Nvidia still maintains astonishing growth, its valuation remains relatively reasonable, and demand shows no signs of slowing. Although physical AI is a long-term direction, it currently contributes very little to performance, and the automotive business’s growth has clearly slowed and has been merged into the edge computing category. Overall, Nvidia’s core growth engine remains its data center business, while space deployment testing and physical AI layout lay the groundwork for the future.
Elon Musk recently publicly praised Nvidia’s (NVDA) GPUs as the best choice for current AI processing and stated that Space Exploration Technologies Corp. (SPCX) will exclusively adopt these chips. Some Nvidia processors will be carried into space next year on the company’s first batch of data center test satellites. This is undoubtedly even better news for Nvidia and seems to mean that good days will continue.
Nvidia’s market value is approaching $6 trillion, yet it still maintains a growth rate more like that of a startup than of the world’s largest listed company. The chipmaker’s revenue more than doubled year over year in the second quarter of fiscal 2027, with a net profit margin as high as 62%. Musk’s statement indicates that this leading chipmaker has not lost its edge. In addition, sending Nvidia chips into space next year will be a major test, examining whether its latest processors are ready for the space economy or whether certain improvements are needed before they can be effectively deployed in an orbital environment. SpaceX seems very willing to take on this financial responsibility from Nvidia, and the company is raising $40 billion specifically to buy more Nvidia chips.
SpaceX is far from Nvidia’s only customer. Every hyperscaler uses Nvidia technology in its data centers, and given AI’s growing importance to the global economy, sales are unlikely to slow. Nvidia has already forecast that its fiscal 2028 revenue will grow 70%, a fiscal year that begins after the last Sunday in January 2027.
Nvidia has long outperformed the S&P 500, especially during the AI boom. The GPU maker’s stock price has risen more than 25% this year, but this return pales in comparison with its fundamental growth. When a company’s revenue and net profit growth exceed its year-to-date stock price gain, it may indicate that its valuation is attractive. For example, Nvidia’s price-to-earnings ratio is only 28.5 times, lower than the technology industry average, and its growth is faster than almost all companies in the sector. Its price/earnings-to-growth ratio (PEG) is 0.48. A PEG of 1 is considered a reasonable valuation, and a positive reading below that indicates that a stock is undervalued. Of course, Nvidia must maintain its growth rate to preserve its attractive valuation. Its fiscal 2028 guidance already points to this, and the fact that companies are rushing to borrow billions of dollars just to buy more chips shows that demand will not slow anytime soon.
Nvidia uses the term “physical AI” to refer to artificial intelligence that operates in the real world rather than on screens. For Nvidia, physical AI is still only a small business within the huge company. In the 12 months ended late January 2026 (Nvidia’s fiscal 2026), its automotive business revenue was about $2.35 billion, accounting for only about 1% of its total revenue of $215.9 billion. Even if Nvidia’s broader physical AI figure was about $6 billion in fiscal 2026, that is still less than 3% of sales.
