SpaceX Just Shared Great News for Artificial Intelligence (AI) Investors. Here Are 2 Stocks That Could Benefit
SpaceX’s AI business is booming. That has important implications for the broader industry.
SpaceX, the aerospace company, announced impressive third-quarter results on October 20, with its artificial intelligence (AI) segment, Super Intelligence (SI), showing remarkable growth. The company's total revenue surged 161% year-over-year to $14.6 billion, while SI revenue climbed an astounding 830% year-over-year to $7.6 billion. This surge in AI demand is likely to be a positive indicator for the broader AI industry.
Investors seeking opportunities in the AI market may find Nvidia (NVDA) and CoreWeave (CRWV) particularly promising based on SpaceX's recent financial disclosures. SpaceX's capital expenditures (capex) in its SI business reached $16.4 billion, a staggering 245.5% increase from the previous year. This heavy investment in AI infrastructure suggests that the company's demand for AI compute is skyrocketing.
SpaceX's CEO, Elon Musk, even predicted a prolonged shortage of superintelligence compute, which could give Nvidia an edge by potentially boosting its pricing power. The company's management indicated that even older Nvidia systems like the H100 GPU are commanding premium prices, suggesting higher demand for newer systems like Nvidia's Vera Rubin architecture. This strong demand for AI compute infrastructure bodes well for Nvidia's future prospects.
CoreWeave, another player in the AI compute space, also benefited from SpaceX's third-quarter results. The company's revenue grew by 112.5% year-over-year to $2.6 billion in the second quarter alone. CoreWeave reported a substantial $104 billion revenue backlog, up 245.5% year-over-year, and the backlog continued to climb into the third quarter.
Despite concerns about the company's debt and customer concentration, SpaceX's management believes that the demand for CoreWeave's AI services will remain high, potentially justifying the company's debt-related challenges.
In conclusion, SpaceX's strong third-quarter performance and AI-focused growth signal a robust future for the AI industry. Investors looking to capitalize on this trend may consider Nvidia and CoreWeave as promising investment options, given their strong market positions and the mounting evidence of growing demand for AI compute infrastructure.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
