Nvidia's Orbital Gambit Meets a $250 Billion Circularity Debate
Published on 08/10/2026 at 07:31 | Redaktion boerse-global.de
The AI trade has spent two years wrestling with terrestrial constraints — power shortages, real estate costs, and the physical limits of data center construction. Nvidia's answer, unveiled on August 4, is characteristically bold: take the compute off-planet.
Elon Musk's SpaceX, during its first earnings call as a public company, announced that its upcoming "Starmind AI1" satellite constellation will run exclusively on Nvidia's Vera Rubin architecture. Musk didn't mince words: "We believe the Vera Rubin architecture is the best architecture. We consider it the best AI computer, and we greatly value our close cooperation and partnership with Nvidia on many levels." The satellite computing unit is slated for launch next year, with SpaceX targeting two gigawatts of orbital AI capacity by the end of 2026 and ten gigawatts by 2027.
The market's response was immediate — Nvidia shares surged past $219 in US trading, pushing market capitalization to roughly $5.35 trillion. Yet the enthusiasm was quickly tempered by a dose of perspective: SpaceX's first-half capital expenditures of around $28.5 billion (nearly $60 billion annualized) pale beside the $100 billion to $200 billion-plus that major AI hyperscalers are pouring into data centers this year alone. The exclusivity endorsement carries symbolic weight, but its financial heft remains modest.
The Circular Financing Question
A more substantive concern emerged the same day, courtesy of "The Big Short" investor Michael Burry. He flagged that Nvidia appears to be collateralizing roughly $250 billion in loans tied to OpenAI's data centers — effectively financing its own customers, who then turn around and buy Nvidia's chips. Burry described it as "circular spending of biblical proportions," a self-reinforcing loop where revenue and guarantees feed each other.
Should investors sell immediately? Or is it worth buying Nvidia?
What makes the warning harder to dismiss is the source. Bernstein's Stacy Rasgon, whose firm rates Nvidia a buy with a $315 price target, voiced the same apprehension. When a bull-aligned analyst house raises circularity concerns, it stops being pure bear narrative and becomes a risk factor both camps must weigh. Burry had already expanded his bearish options positions against Nvidia and Micron on August 2, and investors now face the August 26 earnings report as the moment of truth.
A Valuation Paradox
Amid the orbital hype and financing questions, Bank of America has staked out an unexpected position: Nvidia as its "Top Chip Pick," arguing the stock hasn't been this cheap in a decade on forward earnings. The projected price-to-earnings ratio for 2027 sits near 16 — striking for a company pushing a new class of computing power into space. The bank reads this as evidence that the market still underestimates the structural demand shift.
Supply chain signals reinforce the optimism. Board supplier Zhen Ding Technology and cooling system maker Auras Technology both reported record July revenues, suggesting the production bottlenecks that plagued previous chip generations have yet to materialize.
Insider Activity Tells a Different Story
The operational picture remains robust. Late July brought a long-term partnership with Ilya Sutskever's Safe Superintelligence — Bloomberg pegs the investment at $5 billion, though the figure remains officially unconfirmed — alongside the previously announced $500 billion-plus SK Group collaboration and Korean infrastructure projects with NAVER, Brookfield, and KAIST.
The ownership picture, however, is more nuanced. Director Mark A. Stevens sold 885,000 shares through affiliated trusts on June 18 at weighted average prices around $209–210. Insider sales across the first quarter of 2026 exceeded $3.3 billion, with zero insider purchases during the same stretch. Jensen Huang retains roughly 860 million shares — about 3.5 percent of the company, currently worth more than $150 billion. Institutional activity in early August was split: SCS Capital Management trimmed 8,590 shares while Antipodes Partners added 222,759.
Nvidia at a turning point? This analysis reveals what investors need to know now.
The August 26 Reckoning
Nvidia closed Friday at €193.68, up 2.03 percent on the day and 11.23 percent over seven days, sitting just 4.36 percent below its mid-May record high. The relative strength index stands at 63.5 — momentum without overbought conditions. The company's official guidance for the second quarter calls for roughly $91 billion in revenue, though some analysts whisper about upside toward $95 billion. Consensus estimates sit at $93.61 billion in revenue with earnings of $2.13 per share. Of 37 analyst houses, 36 rate the stock a buy against one hold, with an average price target around $309 — though the euro-denominated consensus sits at €261.93, implying roughly 35 percent upside from Friday's close.
The August 26 report, covering the quarter that ended July 26, will test which narrative prevails: the story of unbroken demand and expanding partnerships, or the quieter accumulation of warning signs — loan collateralization that props up sales and insiders who sell but never buy. The orbital computing bet has captured the market's imagination, but the earnings call will determine whether the valuation can keep pace with the vision.
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