Foxconn's Blowout Quarter and a $40 Billion SpaceX Order Keep Nvidia in the Fast Lane

Foxconn's Q3 revenue jumped 47.12% on AI server demand, but Morgan Stanley warns grid bottlenecks could delay Nvidia's data center sales.

Nvidia's latest run to record territory rests on two very different pillars: the factory floors of Taiwan and the power lines of the United States. The first is humming. The second is the one Wall Street is watching.

Hon Hai Precision Industry — Foxconn to most of the investing world — reported consolidated third-quarter revenue of NT$3.03 trillion on Monday, a jump of 47.12% from the same period a year earlier. The Taiwanese contractor, the largest of its kind globally, assembles Nvidia's high-performance accelerators into finished servers destined for data centers around the world. Its order book therefore offers a real-time read on hardware demand, and management expects the appetite for AI infrastructure to hold through the final quarter of the year.

That guidance matters because it blunts fears of an imminent pause in capital spending. Server assembly lines remain fully booked, and new chip generations are shipping without meaningful friction — a direct boost to the semiconductor designer's earnings power.

Wall Street Stays Bullish, With a Caveat

Morgan Stanley's Joseph Moore reaffirmed his confidence in the stock on Friday, keeping an "Overweight" rating and a $300 price target. A separate Morgan Stanley team weighed in Monday on a less obvious subject: the strain AI data centers place on the U.S. power grid. Their conclusion is that Nvidia is comparatively well insulated from electricity bottlenecks, and that those infrastructure hurdles do not threaten the company's 2027 forecasts.

The distinction is a subtle one. The question for investors is no longer whether customers will place orders — it is how quickly data center operators can secure new grid connections. Without reliable feeder lines and substations, even the most advanced accelerator cards cannot be switched on. If grid buildouts slip further, customers may push back delivery dates, and Nvidia would book revenue later than planned. Available megawatts, in other words, are becoming the primary pace-setter for future sales.

SpaceX's $40 Billion Financing Push

Customer spending, meanwhile, shows no sign of cooling. Reuters reported, citing the Financial Times, that SpaceX is preparing a $40 billion financing package earmarked for the purchase of Nvidia processors. The structure is said to include $10 billion in bank loans and $30 billion in bonds, with Apollo Global Management leading the transaction.

The willingness of major buyers to take on that much debt underscores how strategically important AI infrastructure has become. So long as that buildout continues, Nvidia's order pipeline for the coming years looks secure.

Buybacks as a Backstop

Management has added its own layer of support. In late September, Nvidia authorized a $150 billion increase to its existing share repurchase program, bringing the remaining buyback capacity to $235 billion, to be deployed through fiscal 2028. A program of that size underpins the share price and counters dilution, while signaling that the company can return substantial free cash to shareholders even as it funds enormous research budgets.

The Risk on the Other Side of the Ledger

The counterargument is physical, not financial. Energy infrastructure cannot be accelerated at will. In many parts of the U.S., lead times for specialized transformers run to several years, and permitting for high-voltage transmission lines often drags. If grid capacity meaningfully slows data center construction, growth rates could compress: hardware that cannot be plugged in does not ship, and it ties up capital on buyers' books.

Financing risk compounds the problem. A heavy debt load makes customers more vulnerable to delays — if expected returns fail to materialize on schedule, follow-on orders could be trimmed or scrapped altogether. Elevated valuation multiples leave little room for revenue recognition to slip.

Where the Stock Stands

The shares hit a 52-week high of EUR 216.10 on Tuesday before easing 0.3% to EUR 211.85 on Wednesday. In pre-market trading, the stock was quoted at EUR 213.70, leaving only a sliver of distance to that peak.

Two catalysts will shape what happens next. The first is progress on SpaceX's $40 billion financing — a successful placement of the loans and bonds would confirm that liquidity in the technology sector remains abundant. The second is the steady execution of the $235 billion buyback through fiscal 2028, a running gauge of the company's financial strength. Should project developers gradually relieve the energy constraints, demand momentum looks capable of carrying the stock higher still. If grid bottlenecks force entire project phases to be rescheduled, however, investors should brace for a sharp correction.