Elon Musk’s Space Exploration Technologies (NASDAQ:SPCX) is continuing to rally. A few more big up days like this and SpaceX might have a serious shot at surpassing Nvidia (NASDAQ:NVDA | NVDA Price Prediction) in market cap for the title of Earth’s largest company.
At this pace, count me as unsurprised if the move happens, even as skeptics stay sidelined or even begin placing bets against the company, something that could prove dangerous given the explosive momentum. With a $60 billion deal to buy Cursor, the AI division might finally have the missing piece to the puzzle.
Cursor could empower xAI in a profound way, while Terafab helps secure SpaceX’s silicon future
Whether Cursor helps nudge Grok to the frontier, though, remains a mystery. Either way, there’s going to be a lot of AI compute for xAI to floor it in a bid to keep up with the likes of the stars at the front of the pack. Personally, I wouldn’t count Grok out of the AI game yet, especially after the Cursor acquisition.
If Terafab, an ambitious undertaking that I think rivals sending rockets into space, ends up being a success (and a lot of forces are working against it being a success), SpaceX and Tesla (NASDAQ:TSLA) might not face the chip shortage that most other scalers in the AI race might run into.
Combined with SpaceX’s ability to get up and moving at record speed, as well as its ability to procure necessary components to build those data centers, I certainly wouldn’t want to bet against SpaceX now that it’s possible to do so on public markets. Is it an uphill battle for Grok from here?
For models that aren’t named Claude, I’m sure it’s a tough task to keep pace. But, at the end of the day, difficult challenges are what fuel Elon Musk.
With Cursor aboard (an all-stock deal), two premier tenants at Colossus 1 and 2, and a balance sheet that’s in great shape, it’s full speed ahead for SpaceX on AI. While it’s tough to tell where the Cursor deal puts xAI, I do think that the scene just got more level. And for a company like Anthropic, there’s no room to lift the foot off the gas.
The AI opportunity at hand
In a prior piece, I highlighted that AI, rather than space, was key to moving the needle higher. Indeed, we’ve already heard about Elon Musk’s ambitious plans in space. Orbital data centers, facilities on the moon, expanding Starlink, the Starfall capsule, and the bulkier payloads that Starship makes possible.
It’s all fun and exciting, but they’re longer-term projects that many traders hovering around shares of SpaceX probably won’t be sticking around long enough for. In any case, if Cursor empowers developers while SpaceX breaks free from depending on others for chip production, I think SpaceX might have what it takes to top Nvidia.
Whether it’s this latest surge that marks the start of such a run, though, remains the big question. I wouldn’t bet on or against SpaceX either way. Sometimes, if the volatility and stakes are too high, it makes more sense to sit on the sidelines.
If Terafab, a multi-year $55 billion initial undertaking (that could amount to $119 billion further down the line), works out, SpaceX will have fixed the hardware bottleneck.
And with Cursor aboard, perhaps the company is also well on its way to moving at the absolute cutting edge of software production. The thought of next-level agentic chip design (a software problem) and full control over chip production could make SpaceX a serious contender for the world’s largest company.
The bottom line
Any way you look at it, SpaceX seems to have the infrastructure that other firms might need to pay a toll to access.
Whether it’s accessing Starlink’s satellite network, launching things into orbit via Starship, building excellent software via Cursor and Grok, renting AI compute from one of the Colossus facilities, getting a robotic workforce via Tesla’s Optimus humanoid robot, or getting chips produced at Terafab, it seems like many paths to the future lead through one of Elon Musk’s companies.
With such a wide infrastructure moat, I’d say it’s hard to bet against SpaceX becoming the world’s largest company, whether it’s this year or in 10 years from now.
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