SpaceX and Alphabet are a comparison that not many investors are making. This article evaluates both as potential AI stock investments.
SpaceX's AI business is booming
SpaceX acquired xAI, which created the Grok large language model and also owns X (formerly Twitter). xAI's revenue grew by 213% to $2.56 billion in the second quarter, demonstrating a booming AI business that surpasses Alphabet's growth rates in Q2.
Alphabet has a different segment of AI
Alphabet develops its own large language models, but its Google Cloud business is a more transparent and thriving AI segment. Google Cloud's revenue increased by 82% year over year to $24.8 billion in Q2, with an $8.8 billion operating profit. This makes Google Cloud, by itself, significantly larger and more profitable than SpaceX's total revenue for the same period, indicating Alphabet's strong position in the cloud computing and AI buildout.
SpaceX is a very expensive stock
Analyst projections for 2026 estimate SpaceX's revenue at $44.6 billion, valuing the company at about 41 times sales. This valuation is considerably higher than Alphabet's historical trading range, which has rarely exceeded 10 times sales. Given its expensive valuation despite high growth, Alphabet is considered a better AI stock buy due to its more reasonable pricing and strong cloud computing growth.
