SpaceX Has Big Investors Like Nvidia, Google, and AMD. That Could Be Dangerous for You.

SpaceX (SPCX) stock is still nothing more than a plaything for investors. The underlying business is a whole other story. It has excellent long-term potential, provided it can get its house in order. 

As you may recall, the SpaceX IPO is when many investors found out that they are not just getting Elon Musk’s space exploration company, but also a set of less-desirable associated businesses. And perhaps soon, a car company named Tesla (TSLA). But that’s another story for another day.

Above is the chart of SPCX as a public company so far. It has been to the moon and back, in terms of its price. IPO at $135, a quick surge to more than $200, and just as quickly a dive to $110. All in a matter of weeks. Like I said, it’s a plaything for traders. 

However, the latest Q2 13F filings revealed a major trend across big tech balance sheets: Semiconductor and cloud giants are taking multibillion-dollar equity stakes in SPCX. 

Disclosures show Nvidia (NVDA) holding roughly 122.8 million shares of SPCX (valued at around $21 billion at the end of Q2), alongside an Advanced Micro Devices (AMD) stake of 3.3 million shares ($565 million) and Alphabet’s (GOOGL) long-standing, expanded position in the satellite and launch giant.

This isn’t standard corporate venture capital. It is a sign that there is a tight capital linkage between artificial intelligence hardware and space infrastructure. That certainly explains why the space trade and the AI trade have been largely the same in terms of direction, just with different volatility levels. 

Why are chip designers and cloud providers sinking tens of billions into a space company? Because AI models demand enormous power and specialized cooling networks, major tech leaders are exploring orbital compute nodes, satellite communications, and edge-data processing. SpaceX’s AI initiatives and Starlink satellite constellation require advanced semiconductor architectures. By taking direct equity stakes, chipmakers solidify their position as primary hardware partners for next-generation space infrastructure. 

Of course, that also means that investors who walk around thinking they are diversified because they own space stocks and AI stocks are not as allocated as they think. That might be a big issue soon. 

While these stakes offer high upside, holding massive equity positions in a newly public, volatile growth stock creates earnings noise for Big Tech.

Accounting rules require companies like Nvidia to report unrealized gains and losses from equity investments on their quarterly income statements. So when SPCX rallies, Big Tech earnings get a non-operating boost. But when SPCX undergoes deep drawdowns (such as its pullback from post-IPO highs), chip giants must write down those paper losses, adding volatility to their reported earnings per share (EPS).

If you hold single mega cap stocks like NVDA, GOOGL, or broad market index funds alongside dedicated space ETFs (like (WARP) or (UFO)), you own SpaceX twice. That is, once directly through the space fund, and once indirectly through the balance sheets of those equity giants. 

If space stocks experience a sector-wide correction, the negative mark-to-market hit on Big Tech balance sheets creates a “feedback loop” that hits tech index funds at the same time. This is not the same thing as how many capital lines are intertwined in ways that appear to be “circular finance” among the big guys. 

But in the same way 2008 was about a credit “contagion,” a similar bottom-line risk exists. It is fun while it lasts, but when it reverses lower, there are no obvious places to hide.

My Takeaway

Nvidia, Alphabet, and AMD revealing major positions in SPCX confirms that space is no longer a speculative side-theme. It is part and parcel, an extension of the AI hardware ecosystem. And thus, part of a snowball effect that is increasingly weighing on the stock market. Remember that buying Big Tech stocks now means taking on indirect exposure to private credit deals, venture-style bets, and volatile equity stakes on corporate balance sheets.

This also means that traditional hedges for Big Tech can extend to helping offset the next crack in the armor of the space trade. The ProShares Short QQQ (PSQ) ETF is one that comes to mind. It is the Invesco QQQ ETF (QQQ), but in reverse, and with the potential “baggage” of the math of investment loss. That is, you lose 20%, you need to make 25% to get back to even, not just a 20% gain.

Rob Isbitts is a semi-retired CIO, former fiduciary investment advisor, and Barchart columnist. Check out his other work at ETFYourself.com (featuring the Fresh Charts weekly trading post), and ROAR.PiTrade.com, helping investors to better-manage their own portfolios.