Hyperscalers Shine: Amazon and Microsoft Lead, SpaceX Falls Behind

Hyperscalers are companies that own large data centers and have been spending aggressively to build out artificial intelligence infrastructure.

Amazon is the world's largest cloud computing company, with a strong proprietary custom-chip business including its Trainium AI accelerators and Graviton central processing units. This business helps Amazon reduce internal build costs and saves it money on inference.

The company also has partnerships with OpenAI and Anthropic, in which it holds about a 20% stake, driving growth in cloud computing.

Microsoft has been one of the most beleaguered stocks in the cloud computing sphere amid concerns about its reliance on OpenAI. However, after strong earnings reports, Microsoft may have brushed aside those issues and is a solid stock to hold.

SpaceX's cloud unit appears to be overearning, with the company getting paybacks as quickly as one year due to strong pricing from Alphabet. This type of pricing is likely not sustainable over the long term, making SpaceX a stock to avoid.