Elon Musk Nvidia Stock Comments Just Handed Jensen Huang a New Tailwind

During earnings calls, Elon Musk makes a certain type of statement that has a different impact than the rest of his remarks. less dramatic. less widely shared. The kind of statement that subtly modifies a few billion dollars’ worth of Wall Street expectations but gets lost in the day’s other Musk headlines. Nvidia is the company that benefited from his most recent comments regarding Tesla’s capital expenditures.

It was a mixed quarter setup. Tesla’s earnings exceeded projections, but its revenue fell short. This type of divided decision typically leads to a discussion about whether the stock is worth its price. Instead, Musk rerouted the discussion. He advised investors to anticipate “a very significant increase in capital expenditures,” with the money going toward chip design, AI software, AI training, and the manufacturing capacity required to grow Optimus and the robotaxi service. For Tesla, it’s not a novel theme. However, the dollar implications are the kind that spread, and the framing was more forceful than usual.

Nvidia is most obviously affected by that ripple. For some workloads, Tesla creates its own chips, something Musk has been open about for years. The company has positioned its Dojo program and its follow-up initiatives as a long-term defense against Nvidia’s pricing power. However, whenever Musk discusses in detail how Tesla actually trains its biggest AI models, Nvidia is mentioned. He made it clear last year that Tesla had no intention of taking Nvidia’s place. He and Tesla’s communications team both affirmed in March that SpaceX and Tesla would continue to place large-scale orders for Nvidia chips. He described himself as a “huge admirer” of Jensen Huang. In the short term, Tesla continues to purchase what Nvidia sells, regardless of the long-term strategy.

A few months ago, there was a moment that is worth remembering. Musk was asked which stock he would purchase if he had to choose one outside of his own companies during a podcast with Indian investor Nikhil Kamath. He began by deflecting, claiming that he simply builds things and doesn’t actually buy stocks or maintain a portfolio. Then, almost as an aside, he stated that Nvidia was “obvious at this point,” mentioning Google in the same sentence. It’s difficult to ignore how casually he gave two of the biggest corporations in the world another endorsement from what is arguably the industry’s loudest voice when watching that exchange.

It’s important to remember the numbers associated with all of this. Nvidia is the biggest company in the world by that metric, trading at about $198 and having a market capitalization of about $4.8 trillion. Through 2027, Jensen Huang anticipates $1 trillion in chip orders from the Blackwell and Vera Rubin lines. The average target set by analysts is $269, which suggests an upside of nearly 35%. However, investors should always be wary of analyst targets. There is a legitimate claim that the AI buildout is overburdened and that any reduction in capital expenditures from the biggest clients would be disastrous. Musk’s remarks go in the opposite direction.

The dynamic is intriguing because Musk and Huang are not partners in the conventional sense. According to reports, SpaceX is nearing the acquisition of Cursor, an AI coding company. This puts Nvidia in a difficult situation where a significant chip customer is suddenly linked to the company’s most well-known competitor in certain product categories. Last week, Bloomberg pointed out the awkwardness. The order flow has not been altered by any of it.

Observing these remarks over time gives the impression that Musk and Nvidia’s partnership is one of those covert partnerships based more on necessity than love. Tesla desires its own chips. Nvidia would prefer not to rely on Tesla. Despite this, both continue to do business with one another. That should be sufficient for investors in Nvidia. Musk doesn’t have to adore the stock. All his businesses need to do is continue to write the checks. They are at the moment.