AMD shares experienced a sharp reversal after SpaceX selected Nvidia hardware for a major artificial intelligence project.
The stock climbed 7% during regular trading to close at $518.58. However, it then fell about 8.8% in after-hours trading to approximately $472.98.
The selloff followed news that SpaceX would use Nvidia chips for its StarMind AI1 satellite computing platform. The decision added to investor concerns about AMD’s ability to compete with Nvidia for the most advanced AI workloads.
Strong AMD Earnings Fail to Meet High Expectations
AMD reported second-quarter results that exceeded Wall Street forecasts.
However, the company’s strong performance was not enough to satisfy investors who had expected even faster growth from its artificial intelligence business.
AMD shares have rallied significantly over the past year. As a result, the company faces increasing pressure to deliver exceptional AI revenue growth and justify its elevated valuation.
These demanding expectations contributed to the negative after-hours reaction.
SpaceX Selects Nvidia for StarMind AI1
SpaceX announced a partnership with Nvidia to develop the StarMind AI1 satellite computing payload.
Each satellite is expected to use Nvidia Rubin GPUs and Vera CPUs to provide data center-level computing power in space.
The agreement represents another important win for Nvidia as it expands its influence across AI infrastructure, cloud computing and advanced aerospace applications.
For AMD, the decision was viewed as a highly visible competitive setback.
Why the SpaceX Decision Matters for AMD
SpaceX may not purchase as many chips as major cloud providers such as Microsoft, Google or Amazon.
However, its choice still carries significant symbolic importance.
SpaceX is one of the world’s most prominent technology companies. A public endorsement from Elon Musk can shape investor sentiment and influence how customers view the wider AI chip market.
By selecting Nvidia, SpaceX reinforced the perception that Nvidia remains the preferred supplier for the most demanding AI projects.
AMD, meanwhile, continues to be viewed by many investors as the second-largest competitor in the market.
AMD Shares Experience a Volatile Session
AMD’s stock performance showed how quickly market sentiment changed following the news.
| Market metric | Performance |
|---|---|
| Regular trading session | Up 7% to $518.58 |
| After-hours trading | Down 8.79% to about $472.98 |
| Estimated net move from previous close | Down approximately 2.3% |
| 52-week trading range | $149.22 to $584.73 |
| Year-to-date performance | Up approximately 136.9% |
Despite the after-hours decline, AMD shares remained significantly higher for the year.
Nevertheless, the reversal highlighted how sensitive the stock has become to news involving artificial intelligence customers and competitors.
Is the SpaceX Loss Material or Symbolic?
The financial impact of the SpaceX agreement may be limited compared with the contracts available from major cloud companies.
Hyperscalers such as Microsoft, Amazon and Google purchase AI hardware on a much larger scale.
Therefore, losing SpaceX as a potential customer may not significantly change AMD’s near-term revenue forecasts.
The larger risk is the market narrative.
Nvidia’s latest victory strengthens the belief that its hardware and software remain the first choice for advanced AI infrastructure.
AMD’s Real Battle Is With Hyperscalers
AMD’s long-term AI opportunity depends more heavily on securing orders from cloud providers and leading AI laboratories.
Analysts have noted that the company is gaining customer commitments for its MI350 accelerators.
AMD has also expanded its relationship with Anthropic through a major investment and chip agreement.
These partnerships could generate significantly more revenue than a single SpaceX contract.
Therefore, investors should avoid viewing the SpaceX decision as proof that AMD has lost the wider AI chip competition.
Nvidia’s Competitive Advantage Continues to Grow
Nvidia already holds a dominant position in artificial intelligence accelerators.
The company’s market value is substantially larger than AMD’s, reflecting its stronger revenue base and leading position in AI computing.
High-profile customer wins also strengthen Nvidia’s wider technology ecosystem.
Its CUDA software platform remains one of the company’s most important advantages. Developers and businesses have spent years building applications around CUDA, making it difficult and expensive to move to another chip provider.
Every major Nvidia agreement can deepen this ecosystem and increase the cost of switching to AMD hardware.
What Is the Bullish Case for AMD?
The global market for artificial intelligence infrastructure is large enough to support more than one major chip supplier.
AMD does not need to replace Nvidia to generate substantial growth. It only needs to capture a meaningful share of the expanding market.
The company’s EPYC Venice processors and MI350P accelerators are entering production and attracting more customer interest.
AMD can also compete through pricing, product performance and its ability to offer customers an alternative to Nvidia.
From this perspective, one lost contract does not determine the outcome of the broader AI chip race.
What Is the Bearish Case for AMD?
The main concern is that other leading AI companies could follow SpaceX’s example.
Elon Musk has considerable influence across the technology and investment industries. His public support for Nvidia may strengthen confidence in Nvidia’s products while raising questions about AMD’s competitiveness.
If more frontier AI companies select Nvidia exclusively, AMD could struggle to achieve its expected GPU revenue growth.
This would create additional pressure during the second half of 2026, particularly because AI accelerators are central to AMD’s investment case.
Nvidia Shares Rise Following SpaceX Deal
Nvidia stock gained 2.56% during the regular trading session to close at $211.94.
Shares then rose by another 2.16% in after-hours trading to approximately $216.51.
The positive reaction suggests that investors viewed the SpaceX agreement as further evidence of strong demand for Nvidia’s AI hardware.
It also demonstrated the contrasting market reaction to the news. Nvidia gained another prestigious customer, while AMD faced concerns about its competitive position.
What the SpaceX Deal Means for AMD Investors
The SpaceX-Nvidia partnership is more important as a signal than as an immediate financial loss for AMD.
SpaceX is a prestigious customer, but the largest AI chip opportunities remain with hyperscalers, data center operators and artificial intelligence laboratories.
AMD still has a credible growth opportunity through its MI-series accelerators and EPYC server processors.
However, the company must continue securing major customers and improving its software ecosystem to challenge Nvidia effectively.
The sharp after-hours decline shows that investors expect AMD to deliver near-perfect execution. Any high-profile loss can therefore create significant stock volatility, even when the direct revenue impact is relatively limited.
