3 Stocks That Look Like Far Better Long-Term Investments Than the SpaceX IPO

The article argues that Amazon, Microsoft, and Alphabet are better long-term investments than SpaceX, citing their established cloud businesses and strong AI-driven demand. It highlights projected data-center capex of about $650 billion in 2026 for major hyperscalers, rising to over $1 trillion next year, and notes that Amazon and Microsoft look historically cheap on operating cash flow. The piece is opinion-driven rather than event-driven, so near-term market impact is likely limited.

Analysis

The real signal here is not that cloud is strong; it’s that hyperscaler demand is still outrunning the industry’s ability to build power, racks, and networking fast enough. That creates a short-term bottleneck economy where the immediate beneficiaries are less the cloud platforms themselves and more the picks-and-shovels layer: semis, networking, optics, electrical gear, liquid cooling, and data-center REITs. If capex continues to re-accelerate over the next 2-4 quarters, margin pressure can show up in the clouds before revenue re-rates, because depreciation and power costs lag bookings.

The market is likely underestimating the second-order effect of AI customers concentrating spend in a few vendors. That concentration improves pricing for AMZN/MSFT/GOOGL, but it also raises the risk of a near-term digestion phase if enterprise AI workloads fail to monetize quickly enough. In that scenario, the stocks can still work over a 2-3 year horizon, but multiple expansion probably pauses as investors focus on free-cash-flow conversion rather than top-line growth.

Relative to the broader AI trade, the contrarian point is that the best risk/reward may not be the hyperscalers themselves. AMZN/MSFT/GOOGL already have durable franchises and are less likely to be disrupted; the more asymmetric upside sits in enablers whose revenues are directly levered to each incremental dollar of data-center spend. The article’s SpaceX comparison is directionally useful, but the bigger takeaway is that public markets still offer a way to own the AI capex cycle without paying venture-style multiples.

Near term, watch for any guidance that decouples capex growth from booking growth; that would be the first sign the trade is getting crowded. If power availability, grid interconnects, or GPU supply ease faster than expected, these names may re-accelerate on margin rather than revenue, which is a cleaner bull case than the market is pricing today.

Key Decisions for Investors

• Go long NVDA as the cleanest leverage to hyperscaler capex acceleration; use a 6-12 month horizon and size for volatility, since the trade works if data-center spend keeps compounding but can de-rate quickly on any capex digestion.
• Pair trade: long AMZN/MSFT basket vs short a basket of lower-quality software names that depend on AI enthusiasm but lack direct infrastructure revenue; this isolates the cash-generating winners from narrative-only beneficiaries over the next 3-6 months.
• Add a tactical long in infrastructure enablers such as ANET, CRDO, or ETN on pullbacks; these should outperform the hyperscalers if the next earnings season confirms another leg of capex expansion.
• If already long AMZN/MSFT/GOOGL, consider selling 1-2 quarter covered calls into strength; upside is likely more linear than explosive, while implied volatility may be elevated relative to realized moves.
• Watch for a catalyst-driven entry after the next hyperscaler earnings prints; if capex guides up again without a matching revenue step-up, fade the initial pop in the cloud names and rotate into suppliers for the better 2-4 quarter risk/reward.