The upcoming SpaceX IPO will be huge. The company is reportedly targeting a $1.75 trillion valuation, and aims to raise as much as $75 billion with its stock sale.

I recently wrote that I expect the company to end up going public at closer to a $1.5 trillion valuation. But no matter where the final number lands, this initial public offering should be one of the biggest the world has ever seen.

It can be challenging to secure an allocation in hot IPO stocks like SpaceX. But in this case, there’s good news for everyday investors: Reportedly, small retail investors are getting priority access to the share sale, with up to 30% of SpaceX stock being allocated to them rather than the usual big fish.

Believe it or not, however, the best way for investors to profit from the SpaceX IPO may be to look at stocks that will benefit indirectly from it. With the $75 billion in fresh capital the company will obtain, I expect it to go on a spending spree. And one artificial intelligence (AI) company in particular may end up with billions of dollars of SpaceX’s newly raised cash.

Nvidia

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Expect SpaceX to give this AI business a chunk of its $75 billion windfall

SpaceX may be a space stock, but it’s also an AI stock. The Elon Musk-led company includes Starlink, a satellite internet provider. Moreover, it recently acquired another Musk operation — xAI, which developed the Grok chatbot and owns social media platform X. SpaceX is such a large buyer of GPUs and other specialized AI chips that it recently revealed plans to design and manufacture its own AI processors in-house (in partnership with Tesla). That plan, however, will take years to come to fruition.

In the meantime, expect SpaceX to continue relying on outside suppliers, especially Nvidia (NVDA 4.43%). Indeed, Musk revealed last month that he expects all of his companies, SpaceX included, to continue buying Nvidia chips “at scale.”   

Why does SpaceX need so many Nvidia chips? Designing rockets is a data-intensive task. And like many companies, SpaceX has adopted AI-assisted tools to make the design, manufacturing, and troubleshooting processes faster, easier, and more cost-efficient. AI is so valuable to the rocket industry that Nvidia recently launched a space computing initiative with dedicated components specifically designed to meet the needs of companies like SpaceX.

A press release from the company reads, “Engineered for size-, weight-, and power-constrained environments, Nvidia Space-1 Vera Rubin Module, IGX Thor, and Jetson Orin platforms deliver data-center-class performance and edge AI inferencing for orbital data centers, geospatial intelligence, and autonomous space operations.”

One of those targets, “orbital data centers,” has me particularly excited. 

Right now, the world is experiencing a $7 trillion build-out of data center infrastructure to support the AI industry’s rapidly rising demands for computing power. One of the biggest constraints on the pace of this build-out is the availability of power that can be dedicated to electricity-hungry data centers. This is a big reason why specialized nuclear energy stocks focused on small modular technology are garnering so much attention.

Why do data centers require so much energy? One big reason is that chips and servers get quite hot when they’re working hard, but need to be kept cool to deliver maximum performance. That’s difficult to manage, and takes plenty of power above and beyond what is required to simply run the servers themselves.

But here’s the thing: Space is already very cold, and offers access to solar energy unfiltered by Earth’s atmosphere. Placing AI data centers in space, therefore, could help accelerate the infrastructure scale up.

Data centers today overwhelmingly feature Nvidia GPUs. Some reports claim that Nvidia has at least an 85% market share in the AI processor segment. So more data centers being built would directly benefit its bottom line.

There will be some serious challenges to establishing orbital data centers, including matters of physics like the vacuum of space and radiation. But armed with billions in fresh cash, expect SpaceX to accelerate the development of its massive Starship rocket, which could be used to bring orbital space centers online cheaper and faster than most expect.

It’s a long shot, to be sure. But if SpaceX can make orbital data centers a reality, there are few realities in which that won’t be a giant boon to Nvidia’s business.