AI infrastructure investment boom is expected to continue! SpaceX (SPCX.US) computing power expansion plan exceeds expectations; JPMorgan is bullish on Dell Technologies, Inc. Class C (DELL.US), Credo (CRDO.US), and other beneficiary stocks across the supply chain.

JPMorgan stated in its latest research report that SpaceX (SPCX.US)'s announced Q3 2026 results and latest computing power expansion plan further confirm the strong momentum of artificial intelligence (AI) infrastructure construction and are expected to ease market concerns that power supply and financing constraints may slow AI investment. The bank believes that the positive signals released by SpaceX will not only benefit the entire AI hardware and networking equipment supply chain, but will also have a positive impact on companies directly involved in its infrastructure construction, such as Dell Technologies, Inc. Class C (DELL.US), Credo Technology (CRDO.US), and Super Micro Computer, Inc. (SMCI.US). Recently, as the scale of AI data center investment has continued to expand, the market has begun to worry that factors such as insufficient power supply, long infrastructure construction cycles, and rising financing costs may limit the pace of computing power expansion by technology companies. However, JPMorgan believes that the operating data and capital expenditure plans newly disclosed by SpaceX show that demand for AI infrastructure construction remains strong and that relevant companies have not significantly slowed their investment pace because of these constraints. According to the latest information disclosed by SpaceX, the company expects its computing power scale to reach 2.5 to 3 gigawatts (GW) by the end of 2026, higher than the target of more than 2 GW proposed in August this year. SpaceX's computing power scale had already reached 1.7 GW by the end of the third quarter and is expected to expand further by the end of October. More notably, SpaceX has substantially raised its computing power construction target for 2027. Previously, the company expected to have a cumulative 5 to 10 GW of computing power by the end of 2027 and was more inclined toward the upper end of that range. Now, management expects to add at least 10 GW of computing power in 2027, bringing the total scale at year-end to about 13 GW. At the same time, SpaceX also plans to further expand the scale of power and cooling infrastructure construction. Under a more optimistic scenario, the company's newly added power and cooling infrastructure capacity in 2027 could reach 20 GW. Management stated that although uncertainty remains over fully converting all of this infrastructure into actual computing power, it does not rule out the possibility that the future computing power scale could further exceed current targets. JPMorgan believes that this plan shows that SpaceX not only remains optimistic about future AI computing power demand, but is also creating conditions for deploying more computing equipment later by building power and cooling facilities in advance. For investors who had previously worried that power supply could become a major obstacle to AI infrastructure expansion, this undoubtedly sends a positive signal. On capital expenditure, SpaceX expects investment in the fourth quarter of 2026 to reach US$35 billion to US$40 billion, a sharp increase from US$19.6 billion in the third quarter and far above US$6.9 billion in the same period last year. Calculated according to the guidance range, the company's fourth-quarter capital expenditure will grow by about 79% to 104% quarter on quarter, with a year-on-year increase of about 4 to 5 times. This means that SpaceX is significantly accelerating the pace of data center and related infrastructure construction. It is worth noting that SpaceX's large-scale investment plan is not entirely based on long-term demand expectations. Management reiterated that, based on current computing power rental prices, the payback period for newly deployed computing equipment has shortened to less than one year. The company's current computing power rental price is slightly above the upper limit of the previous range of US$30 to US$50 per watt. Management also stated that as demand for computing power continues to grow and a new generation of computing equipment is put into use, it does not rule out that the payback period for some projects in 2027 could be further shortened to about six months. JPMorgan pointed out that this means that although AI data center construction requires huge capital investment, current market demand and computing power rental prices can still support a relatively fast investment payback speed. As for the financing pressure that the market is focused on, stronger revenue monetization capability is expected to ease investors' concerns to a certain extent. From the perspective of the supply chain, JPMorgan believes that SpaceX's expansion plan has important industry reference significance. As U.S. technology companies successively enter the third-quarter earnings disclosure period, SpaceX may become one of the first companies to ease market concerns about a slowdown in AI infrastructure construction through actual investment actions and business outlook. The bank expects that SpaceX's positive signals will help boost investor confidence in AI servers, network connectivity equipment, and related hardware suppliers. Among them, Dell Technologies, Inc. Class C, Credo, and Super Micro Computer, Inc. deserve close market attention because they directly benefit from SpaceX's infrastructure expansion. Dell Technologies, Inc. Class C has a business presence in enterprise servers and AI infrastructure, Credo mainly provides high-speed connectivity and data transmission-related technologies, and Super Micro Computer, Inc. is a supplier of AI servers and data center hardware. As SpaceX continues to expand the scale of computing equipment deployment, demand for related hardware and network connectivity products is expected to be supported. However, JPMorgan's research report did not specifically quantify the additional orders or revenue that the above three companies could obtain from SpaceX's expansion plan, nor did it adjust the earnings forecasts or target prices of the relevant companies as a result. As of October 20, JPMorgan's ratings on Dell Technologies, Inc. Class C and Credo were both "Overweight," while its rating on Super Micro Computer, Inc. was "Neutral." The three companies' stock prices on that day were US$461.56, US$171.51, and US$32.47, respectively.