TLDR
- Nvidia stock rose 0.7% in premarket trading Friday to $226.24 after Elon Musk detailed xAI’s chip buildout plans.
- Musk said xAI’s Memphis “Colossus” data center already runs about 780,000 Nvidia AI chips.
- Another 220,000 GB300 Blackwell chips are expected online next week, with 220,000 more in October.
- The pace could ease worries about whether tech firms can build data centers fast enough to match chip demand.
- Rival Oracle has faced delays on its own data center project in New Mexico, a contrast to xAI’s rapid rollout.
Nvidia got a boost Friday from an unlikely source: a late-night post from Elon Musk. The billionaire laid out fresh numbers on how many Nvidia chips his xAI business is buying and installing.
Nvidia stock climbed 0.7% in premarket trading to $226.24 following the update. That marked a bounce back after the stock had slipped 0.4% in recent sessions.
Musk said xAI’s Memphis data center complex, known as “Colossus,” already houses around 780,000 Nvidia chips. Those span both the Hopper and Blackwell chip generations.
He added that another 220,000 of Nvidia’s newer GB300 Blackwell chips should be running next week. A further 220,000 are expected in October.
“If we get lucky, yet another 220k GB300 by late December,” Musk posted on X.
None of this is entirely new. Colossus was always planned to include at least one million graphics processing units, according to the local chamber of commerce.
Why the Pace Matters
What stands out is the speed. If Musk’s timeline holds, Colossus could house as many as 1.44 million chips by year end.
That kind of buildout speed matters for Nvidia. The company needs data centers to get built quickly so its chips don’t pile up unused in warehouses.
It also offers a contrast to some of the industry’s other big projects. Oracle has run into trouble with its “Project Jupiter” data center campus in New Mexico.
Oracle reportedly issued a contractual notice that could delay payments to its developer there, according to The Wall Street Journal. Oracle has said the project remains on track.
Analysts Stay Bullish
Wall Street’s view on Nvidia hasn’t wavered. Four analysts currently rate the stock a “Strong Buy” and fifty rate it a “Buy,” with just one “Hold.”
The consensus price target sits at $324.14, well above current trading levels. Some firms have gone even higher, with Wedbush and BMO Capital Markets both setting targets near $340 to $345.
Institutional buying has continued too. SFE Investment Counsel lifted its Nvidia stake by 1.9% last quarter, making it the firm’s second largest holding.
Not everyone is selling optimism without caveats. Insiders sold roughly $399.5 million worth of Nvidia stock over the past three months, including a large sale by director Mark Stevens.
That sale was tied to a prearranged trading plan rather than a signal of concern. EVP Timothy Teter also sold stock under a similar prearranged plan.
Nvidia’s last earnings report, posted August 26, topped expectations on both revenue and profit. Revenue came in at $96.22 billion, up 105.9% from a year earlier.
Higher Treasury yields have weighed on expensive tech names broadly, including Nvidia, in recent weeks. Rising memory costs are also expected to pressure margins going forward.
For now, Musk’s chip orders are giving the stock a fresh tailwind heading into the weekend.
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