AMD vs. SpaceX: Here's The Stock I'd Buy Now

AMD and SpaceX are two companies often overlooked when comparing stock investments. AMD manufactures computer components utilized in artificial intelligence (AI), while SpaceX designs and launches rockets. Notably, SpaceX's AI division, referred to as Super Intelligence (SI), now contributes the majority of its revenue, making it a strong AI investment. However, comparing AMD and SpaceX from a stock standpoint presents an interesting perspective.

Although AMD and SpaceX are not direct competitors, they may have a potential partnership. AMD produces GPUs and other components used to train and run AI models, while SpaceX uses these components for its AI applications. SpaceX's clients can subscribe to its Grok AI model or deploy AI agents like Grok Bots. SpaceX is currently choosing not to partner with AMD, deeming their technology inferior to Nvidia's. This decision could be a concern for AMD investors, as typically, the company with superior technology tends to win.

However, AMD's products are often more affordable, which could be advantageous. AMD has secured significant contracts, such as those with OpenAI and Meta Platforms. In the future, AMD needs to achieve substantial growth to compete with SpaceX.

The AI infrastructure market was previously the best way to invest in AI, but AI applications are now gaining traction as businesses and individuals adopt AI technology. This growing trend is reflected in each company's growth rates. AMD's data center division revenue increased by 107% in Q2 to $6.7 billion, while SpaceX's Super Intelligence division revenue surged by 830% to $7.6 billion in the same period. SpaceX's AI division now surpasses AMD's AI-focused division, posing a significant challenge for AMD's growth.

Despite this, AMD may benefit from the increasing adoption of AI technology, as it will require more computing capacity. Although AMD may not directly supply this capacity to SpaceX, it could acquire other clients needing it, leading to strong future growth. SpaceX's CEO, Elon Musk, anticipates generating between $500 billion and $1 trillion in revenue next year, primarily driven by AI.

While Musk's projections are often overly optimistic, reaching that milestone within a few years is not impossible. Consequently, SpaceX presents a compelling investment opportunity due to its superior growth and AI application potential.