The Motley Fool compares AMD and SpaceX as AI investments

AMD and SpaceX are both tied to AI, but in different ways

The Motley Fool says AMD and Space Exploration Technologies, or SpaceX, are not usually compared because their core businesses differ. AMD makes computing units and related components used in artificial intelligence, while SpaceX builds and launches rockets. The article says the comparison becomes more relevant because SpaceX owns xAI, and its AI business, which it calls Super Intelligence, now produces most of SpaceX’s revenue.

SpaceX has chosen Nvidia, not AMD

The Motley Fool says AMD and SpaceX are not rivals but possible partners. AMD supplies graphics processing units and other data center hardware used to train and run AI models. SpaceX is presented as an AI application company because customers can subscribe to its Grok AI model or use AI agents such as Grok Bots.

The article says SpaceX could have been a customer for AMD, but has decided against that. It points to remarks Elon Musk made on SpaceX’s Q2 earnings call about Nvidia. Musk said SpaceX will build only on Nvidia because it believes Nvidia’s Vera Rubin architecture is the best AI computer, and he added that SpaceX values its cooperation with Nvidia. The article says that statement effectively closes the door on AMD as a supplier in this relationship. It also says this is a concern for AMD investors because the company with the strongest technology often wins, though AMD can still appeal with lower-priced products that may be less powerful.

Recent growth figures favor SpaceX

The Motley Fool says AMD has won some major contracts, including deals with OpenAI and Meta Platforms. Even so, the article says AMD would need substantial growth to keep up with SpaceX.

It says AI infrastructure has been a leading way to invest in AI over the past few years, but AI applications are becoming more important as adoption grows. That shift is reflected in both companies’ recent revenue growth. AMD’s data center division rose 107% in the second quarter to $6.7 billion. SpaceX’s Super Intelligence division increased 830% to $7.6 billion. The article says that after only one strong quarter, SpaceX’s AI division is already larger than AMD’s AI-focused division, even though AMD took years to build its business.

SpaceX’s outlook and the article’s comparison

The Motley Fool says the gap could continue as AI moves from build-out to deployment. It adds that AMD could still benefit as AI use expands, because more AI activity will require more computing capacity, even if SpaceX is not a buyer. The article says that could support AMD’s future growth, but it still may trail SpaceX.

The article also reports that Musk expects SpaceX to generate between $500 billion and $1 trillion in revenue next year, mostly from AI. It notes that Musk’s projections are often overly optimistic, while also saying that reaching that range in a few years is not outside the realm of possibility. Based on the growth figures and current size of the AI businesses, The Motley Fool says SpaceX is the better buy.