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Eli Lilly Pays Up to $2.9 Billion for a Biotech That Deletes the Antibodies Making People Sick

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Eli Lilly (NYSE: LLY) announced Monday it has agreed to acquire privately held Merida Biosciences in an all-cash deal worth up to $2.875 billion, adding a genuinely distinct approach to autoimmune and allergic disease treatment to its growing immunology pipeline. The transaction includes an upfront cash payment plus additional milestone payments tied to future development and regulatory progress, though Lilly has not disclosed the specific breakdown between the two. The deal is expected to close in the fourth quarter of 2026, subject to regulatory approval.

What makes Merida’s science genuinely interesting is the mechanism itself. Most existing treatments for autoimmune conditions work by broadly suppressing the immune system, which can control symptoms but often leaves patients more vulnerable to infection and other side effects. Merida is developing biologics engineered to do something more precise, selectively identifying and eliminating the specific malfunctioning antibodies, known as autoantibodies, that are actually causing a given disease, while leaving the rest of the immune system intact.

The company’s lead program, MER511, is currently in Phase 1 development for Graves’ disease and thyroid eye disease, two related conditions caused by autoantibodies that overactivate the thyroid-stimulating hormone receptor. Graves’ disease affects an estimated 3 million people in the United States alone, causing an overactive thyroid, while thyroid eye disease can lead to inflammation, eye bulging, double vision, and in severe cases, permanent vision impairment. Early data has reportedly shown the drug substantially lowering the specific antibodies driving both conditions, alongside a favorable initial safety profile.

Beyond its lead asset, Merida’s pipeline includes MER769, an earlier-stage program targeting the antibody responsible for food allergy, asthma, and chronic spontaneous urticaria, along with additional early research in kidney conditions such as membranous nephropathy. That breadth is part of the appeal for Lilly, since a single validated approach to eliminating disease-causing antibodies could theoretically be applied across a range of otherwise unrelated conditions, giving the acquisition multiple potential paths to commercial value rather than resting on one single drug candidate.

This acquisition continues a pattern that has defined Lilly’s strategy through much of 2026. Flush with cash from the success of its weight-loss and diabetes franchise, the company has been unusually active on the acquisition front this year, using that financial strength to diversify its pipeline well beyond obesity and metabolic disease and into other high-value therapeutic categories, immunology chief among them.

For investors tracking the small and microcap biotech space, this deal reinforces a theme that has run through nearly every major pharma acquisition this year. Large, well-capitalized companies continue to pay significant premiums for clinical-stage biotechs with a genuinely differentiated mechanism of action, even when that science is still in early-stage trials with no approved product or meaningful revenue yet. What matters most to these acquirers is a validated, novel approach to a disease category with real unmet need, precisely what Merida’s precision antibody-elimination platform represents here. That pattern is worth watching closely, since it continues to set the valuation benchmark for smaller, independent biotechs pursuing similarly differentiated science across immunology and beyond.

Summit Midstream Corp (SMC) – Double E Expansion Reaches Final Investment Decision

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Tuesday, September 01, 2026

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Double E Compression Expansion Project. Summit Midstream reached a final investment decision (FID) on the Double E Pipeline mainline compression expansion following a successful open season that secured 550 million cubic feet per day (MMcf/d) of new long-term take-or-pay commitments. The project will add approximately 900 MMcf/d of forward haul capacity to the Waha Hub through a new bi-directional compressor station, plant connections, and related infrastructure. The expansion is expected to cost approximately $100 million net to Summit’s 70% interest and enter service in the fourth quarter of 2028, subject to regulatory approvals.

Commercial Momentum. A new 200 MMcf/d agreement with an investment-grade shipper brings total contracted firm capacity on Double E to approximately 2.2 billion cubic feet per day (Bcf/d), supported primarily by investment-grade customers. Summit is pursuing contracts for the remaining 450 MMcf/d of incremental expansion capacity and expects strong Delaware Basin production growth to support further commitments. If the project becomes fully subscribed, management expects Permian Segment Adjusted EBITDA to increase from approximately $37 million in 2026 to more than $100 million by 2030.


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Cadrenal Therapeutics (CVKD) – Alignment Reached With FDA On Phase 3 Design For CAD-1005 in HIT

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Tuesday, September 01, 2026

Robert LeBoyer, Senior Vice President, Equity Research Analyst, Biotechnology, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Phase 3 Design Can Move Forward With Expected Endpoints. Cadrenal announced that it held a Type D meeting with the FDA and has reached agreement on the design of the Phase 3 trial to test CAD-1005 in HIT (heparin-induced thrombocytopenia). This includes the primary endpoint, the protocol, and the statistical analysis plan (SAP). We see this as a significant step for the product and for the company’s plan to pursue collaboration to develop CAD-1005.

Primary and Secondary Endpoints Have Been Defined. The primary endpoint will be worsening HIT, defined as progression of thrombotic events through treatment day 14 or hospital discharge. A composite score composed of several aspects of thrombotic events will be used to measure progression. These include extension of an existing thrombus and the proportion of Serotonin Release Assay-positive (SRA+) patients with worsening composite thromboembolic events (CTEs) through Day 14 or hospital discharge.


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Aurania Resources (AUIAF) – Near-Term Catalysts and Outlook

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Tuesday, September 01, 2026

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Strategic Shift to Europe. Aurania has repositioned its exploration strategy from Ecuador toward Europe, where it is advancing gold and critical metals opportunities in Iceland, Italy, and France. The company’s Lost Cities project in Ecuador remains geologically prospective, but exploration is suspended because of uncertainty surrounding Ecuador’s Mining Service Fee (TASA) and unpaid concession fees. Meanwhile, Aurania may earn up to a 70% interest in Iceland’s Thor’s Valley gold project, is evaluating nickel and cobalt recovery from the Balangero tailings project in Italy, and is advancing three exploration permits in Brittany, France.

Near-Term Catalysts. The most immediate catalyst is drilling at Thor’s Valley, where Aurania has commenced an initial six-hole, 770-meter program to verify historically high-grade gold mineralization and test extensions of the system. Additional catalysts include permitting for sonic drilling and bulk sampling at Balangero, advancement of exploration targets in France, and resolution of obligations associated with Ecuador’s Mining Service Fee. Confirmation that a TASA exemption applies retroactively to 2025 could materially reduce Aurania’s liabilities and influence whether it retains or restructures its Lost Cities concession portfolio.


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JOLTS Report July 2026: Job Openings Rise to 7.3 Million as Hiring and Layoffs Both Stay Low

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The Labor Department’s July Job Openings and Labor Turnover Survey, known as the JOLTS report, showed job openings rose slightly to 7.3 million, up from a revised 7.2 million in June. Hiring and layoffs both stayed low, reinforcing what economists describe as a low hire, low fire labor market, a pattern that has now defined US employment conditions for most of 2026.

Hiring slowed slightly in July, with 5.1 million workers finding new positions compared to 5.3 million in June, driven partly by job losses in the professional business services sector. The July hiring rate came in at 3.2%. Layoffs also edged lower, dropping to 1.7 million with a layoff rate of 1.1%. The quits rate, a key measure of how confident workers feel about finding better opportunities elsewhere, held steady at just 1.9%.

Job openings, hiring, layoffs, and quits are the four core JOLTS metrics economists and the Federal Reserve use to gauge labor market health each month. This month’s data shows employers are not cutting staff aggressively, but they are not hiring aggressively either, and workers are staying in their current jobs rather than testing the market for new roles.

The July JOLTS report matters for interest rate expectations because it lands just days after Federal Reserve Chair Kevin Warsh’s debut Jackson Hole speech, where he focused almost entirely on inflation and gave no indication that a softening labor market might justify easing sooner. This report is a reminder that the labor side of the Fed’s dual mandate has not disappeared. July’s official jobs report already showed the economy unexpectedly shed 23,000 positions, with the unemployment rate falling only because discouraged workers stopped actively searching for jobs, not because underlying conditions genuinely improved.

The next major labor market data point arrives Friday, when the Bureau of Labor Statistics releases its August employment report. That release will offer a clearer read on whether the current stagnant hiring pattern is holding steady or beginning to deteriorate more meaningfully, and it will likely shape how markets price the odds of a Federal Reserve rate move at the September meeting.

For investors tracking small and microcap stocks, this labor market data carries direct implications for interest rates and borrowing costs. A genuinely weakening labor market would typically build pressure on the Federal Reserve to cut rates, which would benefit smaller, more leveraged companies through lower borrowing costs. But a labor market that is merely stagnant rather than clearly declining gives the Fed room to keep its primary focus on inflation, the exact posture Warsh signaled at Jackson Hole. That means the higher-cost-of-capital environment currently weighing on small cap stocks may persist longer than some investors expect. Friday’s jobs report, and how the Fed ultimately weighs it against still-elevated inflation, will be an important catalyst to watch heading into the September Federal Open Market Committee meeting.

Why Long-Term Rates Are Rising After Warsh’s Jackson Hole Speech

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Federal Reserve Chair Kevin Warsh gave his first major speech as chair on Friday at the Fed’s annual Jackson Hole gathering, and the tone caught markets off guard. Warsh said inflation remains above the Fed’s target and that fighting price pressure needs to stay the Fed’s top priority right now. Investors had hoped for some hint of a coming rate cut or at least a softer tone. They got neither. All three major stock indexes closed lower after his remarks, and traders quickly raised the odds of a rate hike at the Fed’s September meeting to nearly 61%.

The bigger story is what happened in the bond market afterward. The 30-year Treasury yield has climbed since Warsh spoke Friday, pushing back toward 5.27%, close to the high that rattled markets in late July and led the Treasury Department to step in and buy back more bonds to calm things down, a move we detailed closely at the time. Part of Monday’s move also came from oil prices jumping after renewed fighting between the US and Iran over the weekend.

Here is the part worth understanding clearly. When long-term Treasury yields rise, it usually means one of two things is happening, either investors expect higher inflation ahead, or they simply want more return for tying up their money for 30 years, regardless of inflation. Right now, it is almost entirely the second reason. Expectations for long-term inflation have barely moved, and have actually ticked down slightly. Investors are not panicking about inflation over the next three decades. They are just demanding a higher price to hold long-term government debt, a shift that can be driven by how much the government is borrowing, how fast the economy is expected to grow, or simply less certainty about where policy is headed. Warsh himself hinted at this Friday, saying he would be hard-pressed to call current financial conditions restrictive, a comment that leaves plenty of room for long-term rates to keep climbing even without the Fed making another official move.

That makes 5.3% the level worth watching most closely. A sustained move above it would push borrowing costs back into the same territory that unsettled markets last month.

For companies operating below the $2 billion market cap threshold, this distinction matters. Small and microcap companies typically carry more variable-rate debt than large companies, so their borrowing costs are especially sensitive to moves like this. If rising rates are being driven by investors simply wanting more compensation to hold long-term debt, rather than fear of runaway inflation, that pressure may prove harder to ease with a single Fed decision than markets first assumed when Warsh took over.

Oil Jumps Above $90 After the First US-Iran Exchange of Fire in a Month

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Oil prices surged Monday after the United States and Iran exchanged direct military fire for the first time in roughly a month, ending a relatively quiet stretch in a war now entering its seventh month. Brent crude futures climbed to an intraday high above $91 a barrel, gaining roughly 3% to cross $90 for the first time in about a week, while US benchmark WTI crude gained roughly 4% to trade above $86.

The exchange began when US forces struck Iranian targets on Larak Island, a small landmass inside the Strait of Hormuz that functions as a key monitoring point for Iran’s Revolutionary Guard Corps. US Central Command said the strikes targeted launchers it believed were being prepared to fire rockets carrying sea mines into the strait. Iran retaliated with drone strikes on sites inside Jordan and the United Arab Emirates and said it had seized a bulk carrier vessel near the port of Bandar Abbas. Tehran also claimed an oil tanker struck a mine while attempting an unauthorized transit through the strait, though US Central Command stated it had already cleared that section of the waterway.

Even with this renewed exchange, the physical oil market tells a more nuanced story than headline crude prices alone. Goldman Sachs estimates Persian Gulf crude exports have recovered to roughly two-thirds of pre-war levels, near 15 million barrels per day. The more persistent constraint now sits downstream, in refined products like gasoline and diesel, where capacity has been squeezed by Iranian strikes on regional refineries and, separately, Ukrainian strikes on Russian refining infrastructure. Goldman’s commodities strategists now expect global refined product output to decline by roughly 7 million barrels per day, a constraint that keeps pressure on fuel prices even as crude export volumes have partially normalized.

The policy response is shifting as well. Treasury Secretary Scott Bessent has threatened severe economic consequences for any nation found doing business with Tehran, signaling a pivot from direct military engagement toward economic pressure as the primary tool going forward. Last week, Treasury sanctioned the Emirati branches of a major Egyptian bank it accused of funneling roughly $1.8 billion to the Iranian regime. Critics of that approach note such measures carry limited practical impact unless they eventually target China, which continues purchasing an estimated 90% of Iran’s crude exports. A senior UAE foreign policy adviser put the broader dilemma plainly this week, noting that a state of neither war nor peace cannot be a sustainable solution.

For investors, the national average price of gasoline sitting at $4.08 a gallon despite recent modest declines is worth watching closely, both for its direct effect on consumer-facing small caps already navigating tight household budgets, a dynamic we detailed in earlier coverage of the ceasefire’s collapse, and for its political relevance heading into US midterm elections roughly two months away, where fuel affordability is likely to factor into races that will determine control of Congress. With refined product capacity constrained independent of crude export volumes, sustained pressure on pump prices may persist even if this latest exchange does not escalate further.

DeepSeek’s Founder Is Playing a Different Game With His Hedge Fund

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DeepSeek founder Liang Wenfeng’s hedge fund, High-Flyer Quant, has built pre-IPO positions in several of China’s most closely watched technology listings this year, including memory chipmaker CXMT and humanoid robot maker Unitree Robotics.

Two High-Flyer affiliates, Zhejiang High-Flyer Asset Management and Ningbo High-Flyer Quantitative Investment Management, took positions across a range of sectors ahead of these companies’ public debuts, spanning chip packaging, electronic components, renewable energy, and semiconductor supply-chain businesses. Nearly half of the funds’ allocations this year went to semiconductors and related supply-chain companies.

CXMT was the largest single position, with the two funds holding a combined pre-IPO stake estimated at $26 million. The stock surged 466% on its Shanghai debut last month, briefly making it China’s most valuable listed company, and has gained an additional 20% since then.

The funds also held a pre-IPO stake in Unitree Robotics estimated at $5.8 million. Unitree closed 460% above its IPO price on its first day of trading in Shanghai last week, though the stock has since fallen back about 27% from that peak.

DeepSeek itself took a separate and distinct position in Unitree, acquiring a 2.31% strategic allocation and agreeing to a 36-month lock-up period, three times longer than the 12-month hold most other strategic investors accepted in the same deal. This reflects a different objective than High-Flyer’s approach: DeepSeek’s stake functions as a long-term strategic holding tied to its position in the broader AI supply chain, while High-Flyer’s stake was structured as a return-seeking investment.

These pre-IPO opportunities have emerged in part because Beijing has been encouraging strategically important technology companies to list domestically rather than overseas, creating an environment where funds positioned early in sectors aligned with state industrial priorities, such as semiconductors and robotics, have captured outsized returns.

The strategy has carried real risk. During a global AI-chip selloff in July, only one of High-Flyer’s nine investment products avoided losses that month, according to state-backed media reporting. Chinese quant funds broadly recovered those losses by August.

Separately, DeepSeek’s own capital needs have grown substantially and now diverge sharply from High-Flyer’s scale. DeepSeek opened itself to outside investors for the first time this year, raising 50 billion yuan in its initial funding round, an amount exceeding half of High-Flyer’s total assets under management of 80 billion yuan. DeepSeek is reportedly now in discussions to raise at least $7.4 billion more in a second funding round, which would value the company at $74 billion. High-Flyer and DeepSeek did not respond to requests for comment on these transactions.

The Small-Cap Rally Is Real. Is It Just Getting Started?

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The Russell 2000 is having a year most investors thought they’d never see again. After more than a decade of trailing large-cap stocks, the small-cap benchmark has turned in its best first-half performance in 35 years, gaining about 22% by the midpoint of 2026 and outperforming the Nasdaq by roughly nine percentage points. For a market that has spent years defined by a handful of mega-cap tech names, that’s a meaningful shift in leadership. Here’s the case for why it may have room to continue.

The valuation gap is still historically wide. Even after the rally, small-cap stocks continue to trade at a discount to large caps, despite the gap narrowing in recent months. Some strategists put numbers on that gap directly: the Russell 2000 trades at its cheapest level relative to the Russell 1000 in 25 years. Cheap valuations alone don’t guarantee outperformance, but they mean small caps aren’t rallying from a stretched starting point the way parts of the large-cap market are.

Rate relief is doing real work. Small companies tend to carry more floating-rate debt than their large-cap peers, which makes them more sensitive to the direction of interest rates. Analysts have pointed to the lagged benefits of Federal Reserve rate cuts from late 2025, which have eased financial pressures on companies carrying floating-rate debt, as a real tailwind behind this year’s move. Lower borrowing costs flow through to smaller-company balance sheets faster and more directly than they do for cash-rich mega-caps.

The rally is broadening, not narrowing. Rather than a rotation away from AI, strategists have framed this move as a broadening of market participation beyond the small group of companies that have driven the market for years. Some analysts go further, arguing the market is now rewarding AI exposure more than current earnings, with unprofitable small caps leading their profitable peers — a sign investors are hunting for the next layer of AI beneficiaries beyond the Magnificent Seven.

There’s also a domestic and macro angle. Part of the appeal is that small caps carry less exposure to global trade tensions and mega-cap concentration risk, making them a relatively direct way to bet on U.S. economic resilience rather than global supply chains or a handful of concentrated tech bets.

The case isn’t unanimous. Not every strategist is convinced this is durable. Wolfe Research, for one, has attributed early-2026 strength largely to technical factors, including seasonal flows, year-end asset reallocation and a January reversal following tax-loss selling, and the firm’s stated view has been to “sell the rip in small caps and stick with large-cap leadership” rather than chase the move. That’s a useful reminder that a valuation discount and a rate tailwind don’t eliminate the sector’s historically higher volatility.

The bottom line is small caps enter the back half of 2026 with a rare combination — a historically wide valuation discount, a genuine rate tailwind, and a market that appears to be broadening its search for growth beyond mega-cap tech. Whether that turns into a multi-year cycle of outperformance or proves to be a technical catch-up trade will likely hinge on two things worth watching closely: whether the Fed continues easing, and whether small-cap earnings growth starts catching up to the price action that’s already happened.

Vince Holding Corp. (VNCE) – OVO Acquisition Establishes Multi-Brand Platform

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Friday, August 28, 2026

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

George Proost, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

A multi-brand platform expansion. On August 24, the company completed the acquisition of Drake’s October’s Very Own (OVO) operating business, including its 12 stores, e-commerce platform, wholesale relationships, employees, assets, and liabilities across Canada, the United States, and the United Kingdom.

Acquisition details. OVO’s intellectual property was valued at approximately $117.6 million, with Authentic Brands Group owning 51%, Drake retaining 44%, and Vince purchasing the remaining 5% for $6 million. A portion of the proceeds from the IP sale was used to repay OVO’s debt and provide additional liquidity for its operating business, which Vince acquired for a nominal equity price of $3.


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Lucky Strike Entertainment (LUCK) – From Investment To Cash Flow

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Friday, August 28, 2026

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Jacob Mutchler, Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

A softer finish to the year. The company reported Q4 revenue of $303.9 million, modestly below our estimate of $314.0 million, while adj. EBITDA of $74.1 million missed our $88.0 million estimate by nearly 16%. Management attributed the revenue softness to unfavorable weather at its largest water parks and high viewership of the World Cup and NBA Finals.

June weighed on results. Management estimated the sports-related revenue impact at $7 million to $12 million and the incremental weather impact on the water parks at $3 million to $5 million. Despite these pressures, the underlying trends were stronger than the quarterly results suggest. Full-year same-store sales declined just 0.2%, marking the company’s best comp since fiscal 2023.


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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Unemployment Claims Drop While the Trade Deficit Hits a One-Year High

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New unemployment filings dropped for a second straight week, pointing to a labor market that stays steady even as hiring cools, giving the Federal Reserve room to focus on inflation. But a separate report showed the goods trade deficit widening to its largest in over a year, a reminder that the growth story beneath the calm jobs data is more complicated.

Initial claims for state unemployment benefits fell by 4,000 to a seasonally adjusted 203,000 for the week ended August 22, the Labor Department said, below the 208,000 economists expected and a second straight weekly decline. Claims have spent the year in a tight 189,000–230,000 band and are now near the low end, signaling that employers aren’t shedding workers even if they aren’t hiring aggressively. Despite a surprise dip in July payrolls, unemployment edged down again to a historically low 4.1%.

Continuing claims, a rough proxy for how hard it is to find new work, fell 18,000 to 1.778 million, the lowest in a month. That week also aligned with the survey period for the August payrolls report, giving it extra weight.

Some analysts argue the picture is steadier than the official figures imply. Private data from payroll processors and labor-market analytics firms point to a job market in better balance than the choppier government numbers suggest, with modest but consistent private hiring roughly at the pace needed to keep unemployment flat.

A stable labor market frees the Fed to keep leaning against inflation, which has run above its 2% target for 65 consecutive months. That’s the backdrop as policymakers gather in Jackson Hole, where Chair Kevin Warsh delivers a closely watched keynote Friday, under pressure to address whether inflation is still a threat.

He isn’t short on colleagues sounding the alarm. Three voting members dissented last month against holding rates at 3.50%–3.75%, and the Fed’s preferred inflation gauge held at 3.7%. Kansas City Fed President Jeffrey Schmid called inflation stubborn and sticky; Chicago Fed President Austan Goolsbee named it his top worry.

The goods trade deficit widened to $118.8 billion in July from $101.4 billion in June, the largest since March 2025, when importers front-loaded ahead of “Liberation Day” tariffs. It’s an awkward figure for a White House leaning on tariffs to shrink the gap.

Exports slipped 2.9% to $199.4 billion, dragged by an 11.2% drop in industrial goods. Imports climbed 3.7% to $318.2 billion, powered by an 11.3% surge in capital-goods imports tied to the AI buildout. Oxford Economics’ Matthew Martin expects that demand to persist into 2027. But the near-term cost is to GDP, with trade likely a drag for a fourth straight quarter, an estimated one-point hit in Q3 after subtracting 1.14 points in Q2.

Two reports, two signals. Jobs data says the foundation is intact, giving the Fed cover to focus on prices; trade data says the AI boom lifting markets is also weighing on output. Warsh’s Friday remarks are the next place to look.

Nvidia’s Quiet Growth Engine Is Now Orbiting the Earth

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Nvidia posted another blowout quarter, but the number turning heads inside the report wasn’t the headline figure. It was how much of that growth is now tied to a single, increasingly inseparable partner: SpaceX.

Nvidia reported fiscal second quarter revenue of $96.2 billion, up 106% year over year, with Data Center sales reaching $89.0 billion, up 117%. Strong as those numbers are, the more interesting story sits in the guidance and buildout plans layered underneath them, specifically the expanding role SpaceX now plays in Nvidia’s roadmap.

On the earnings call, CFO Colette Kress confirmed that Nvidia’s next-generation Vera CPU is already shipping to its earliest customers, with SpaceX’s AI unit, SpaceXAI, among the first in line. Kress said Nvidia expects Vera to be deployed across every major hyperscaler, neocloud, AI lab, and system OEM, with shipments already underway to lead partners including Oracle, SpaceXAI, and, starting this quarter, Amazon.

Nvidia does not disclose customer-level revenue, so SpaceX’s exact contribution has to be estimated from outside analysis. Deepwater Asset Management’s Gene Munster estimated on social media that SpaceX now accounts for roughly 5% of Nvidia’s overall revenue, up from around 3% last quarter. He noted that Nvidia appears to have reclassified SpaceX’s revenue out of its AI, Clouds, Industrials, and Enterprise category and into its Hyperscaler category, a shift he attributed to SpaceX’s plan to bring 8 gigawatts of compute capacity online next year, putting it in the same tier as Meta and Amazon. Applied to Nvidia’s $96.2 billion in quarterly revenue, that 5% estimate works out to nearly $5 billion tied to SpaceX. It’s worth noting this figure is an outside analyst’s estimate, not a number Nvidia itself has confirmed.

The relationship goes beyond chip orders. Nvidia also highlighted that SpaceXAI will adopt its Vera CPU to power the agentic AI workloads behind Grok, xAI’s chatbot, handling code execution and data processing so that Nvidia’s GPUs can stay focused on core AI compute. SpaceXAI president Mike Nicolls said Vera gives the company the CPU performance and memory bandwidth needed to manage that orchestration and data load at scale.

Perhaps the most striking development is where some of this hardware is headed next. Earlier this week, the two companies confirmed plans for a space-optimized Vera Rubin NVL72 rack-scale system, designed to launch aboard SpaceX’s first-generation Starmind satellite in the fourth quarter of 2027, with a larger-scale version planned for 2028. The satellite’s AI1 design carries a 120-kilowatt compute payload, peaking at 150 kilowatts, effectively taking Nvidia’s data center hardware into orbit.

Taken together, the picture is one of two companies becoming increasingly dependent on each other in different directions. For Nvidia, SpaceX has become both a major terrestrial customer and the delivery vehicle for putting its chips in space. For SpaceX, Nvidia’s hardware is becoming the computing backbone behind its AI ambitions, from Earth-based data centers to orbital compute payloads.