Better Buy: SpaceX vs. These 2 AI Stocks

After its record-breaking initial public offering (IPO) and follow-up bond offering, Space Exploration Technologies (NASDAQ: SPCX) now has more than $100 billion in fresh capital to deploy. Expect this cash to be deployed quickly. SpaceX is currently losing money at a record pace, and growth will be its best path to profitability.

In total, SpaceX believes its total addressable growth opportunities are valued at an astounding $28.5 trillion. "We believe we have identified the largest actionable total addressable market in human history," the company claimed in its IPO prospectus. More than 90% of that total growth opportunity centers exclusively on one area: artificial intelligence (AI).

While many members of the general public still think of SpaceX as a space company, its IPO prospectus makes clear that SpaceX is a legitimate AI stock. If its AI bets don't take off, it will be very hard for SpaceX to justify its current $2 trillion valuation.

Investors should expect most of SpaceX's IPO proceeds to be allocated to AI growth initiatives. This means SpaceX's money will soon be in the hands of key suppliers to the AI industry. Two major AI stocks stick out as potential beneficiaries.

1. Nvidia

Nvidia (NASDAQ: NVDA) is one of the dominant -- if not the foremost dominant -- suppliers to the AI industry globally. The company's graphics processing units (GPUs) are widely considered best in class, with an estimated 85% market share in AI data centers.

SpaceX and its AI-focused subsidiary, xAI, are already massive purchasers of Nvidia products. SpaceX's first supercomputer, the Colossus 1, for example, incorporates "over 220,000 Nvidia GPUs, including dense deployments of H100, H200, and next-generation GB200 accelerators." SpaceX's Colossus 2 data center, meanwhile, just signed a major deal in which another AI company will pay $150 million per month for access to the data center's Nvidia chips.

SpaceX needs to build more data centers to support AI growth. And those data centers, at least for the time being, will continue to rely on Nvidia products. In short, expect the SpaceX IPO to directly increase Nvidia's revenues.

2. Tesla

Tesla (NASDAQ: TSLA) -- another of Elon Musk's businesses -- has benefited from SpaceX's spending for years. It should continue to do so. Despite being a separate, independent business, Tesla is mentioned 87 times in SpaceX's IPO prospectus. The two companies are tied at the hip in many ways.

Image source: Getty Images.

SpaceX, for example, has purchased hundreds of millions of dollars' worth of Tesla's Megapacks: large, utility-scale battery storage units. In April alone, SpaceX purchased $269 million worth of Megapacks from Tesla. Total Megapack spending by SpaceX since 2024 now surpasses $1 billion.

SpaceX is using those Megapacks to help power its data center build-out. Those data centers, it turns out, could ultimately help Tesla in other ways.

In recent years, Tesla's auto sales have been declining. Yet the company's valuation remains well above $1 trillion. That's because investors now believe Tesla's future depends on AI and autonomous driving, not just car manufacturing.

Rapid advancements in AI have dramatically accelerated the abilities of self-driving technologies. That's opening up new, potentially lucrative markets like robotaxis, which some experts believe will be a multitrillion-dollar opportunity. Tesla already has a pilot robotaxi service operating in several Texas cities. But its technology and real-world data still have a long way to go to scale globally in any meaningful way.

Fortunately, Tesla still has direct access to SpaceX's burgeoning AI capabilities. Earlier this year, Tesla invested $2 billion into xAI, which later fully merged with SpaceX. So not only does Tesla have an incentive to support SpaceX's AI build-out from a direct financial perspective, but it also wants SpaceX's AI capacity to improve in order to advance its own AI and autonomy agenda. In short, SpaceX's post-IPO spending spree should help Tesla in several ways over both the short term and long term.

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.