From The Motley Fool · Prosper Junior Bakiny · · 1m 20s
AI Stocks to Buy Before Year-End Market Drop
SpaceX and Tesla could rise if markets fall before year-end.
In brief
SpaceX and Tesla could rise if markets fall before year-end. SpaceX and Tesla may become attractive buys if the market drops before year-end due to AI growth potential. Originally reported by The Motley Fool.
Market Resilience and Potential Sell-Off
The broader stock market has been resilient this year despite geopolitical tensions and a challenging macroeconomic landscape, but equities could experience a sell-off by year-end.
SpaceX AI Growth Potential
SpaceX could generate $1 trillion in revenue by 2030 with AI accounting for 99% of its value, and its AI segment grew 755% year-over-year to $7.6 billion in Q3.
SpaceX's AI Demand Shortage Risk
Elon Musk warned of potential AI compute shortages that could last a while, as SpaceX sees several times more demand than it can rent out.
Tesla's AI Revenue Streams
Tesla's Full Self-Driving software generates $1 billion in annual recurring revenue from $99 monthly subscriptions and could expand with robotaxi and humanoid robot projects.
SpaceX Valuation Concerns
SpaceX trades at a forward P/E ratio of 85.5, which is very high, making it less attractive at current prices despite strong growth potential.
Tesla Valuation Concerns
Tesla trades at 133.3x forward earnings, which is high, but could become a great buy if the market drops.
The main idea
SpaceX and Tesla may become attractive buys if the market drops before year-end due to AI growth potential.
