If There Is a Stock Market Crash, Here Are 2 Artificial Intelligence (AI) Stocks I Am Loading Up on

Key Points

• These companies may capitalize on the AI industry over the medium term.

• However, they look overvalued at current levels.

• A market downturn could make their shares more attractive.

Some investors fear that a market crash is on the way. Given significant geopolitical tensions, elevated inflation, and other macroeconomic problems, that’s not outside the realm of possibility. However, others may argue that broader equities have held up surprisingly well even amid all these challenges. The S&P 500 is up by a solid 11% year to date.

Long-term investors shouldn’t worry too much about a possible market crash, as they often create attractive opportunities to buy stocks from the discount bin. And if there is a downturn soon, two stocks I will likely be loading up on are Space Exploration Technologies(NASDAQ:SPCX) and Intel(NASDAQ:INTC). Here’s why.

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1. Space Exploration Technologies

SpaceX has a lot going its way. It is an innovative company that has revolutionized space travel through pioneering reusable rockets. SpaceX has a healthy lead over its competitors in this niche, and it is still working on important projects, including Starship, a next-gen rocket that is fully reusable and has a much higher payload capacity than its current rockets. Starship could help SpaceX further reduce space travel costs and improve the business’s economics.

But that’s only one aspect of the business. SpaceX’s most profitable segment right now is Starlink, which provides satellite-based internet connectivity. Starship could also improve this segment by enabling SpaceX to launch far more satellites into orbit. Then there is the company’s artificial intelligence (AI) business, where it has identified the largest opportunity. SpaceX already has partnerships in place and currently offers AI computing capacity to Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) and Anthropic.

The latter could soon go public, increasing demand for the kinds of services SpaceX provides. Meanwhile, SpaceX’s financial results have been strong. In the second quarter, the company’s revenue increased by 92% year over year to $7.8 billion. Sales growth within the company’s AI segment was even more impressive. AI-related revenue was $2.6 billion, up 247.5% year over year. Its loss per share was $541 million, significantly lower than the $1 billion loss per share recorded in the prior-year quarter.

So, SpaceX looks like a solid business, and we haven’t even mentioned the company’s competitive advantage. SpaceX is highly vertically integrated, another factor that helps it keep costs under control. However, there is one problem with SpaceX right now: Valuation. The company has a market cap of $1.9 trillion — despite generating just $7.8 billion in its latest quarter and being unprofitable — and an incredibly high price-to-sales ratio of 65.

It seems the market has already factored some of its success into the stock price. That’s probably why, despite strong financial results and recent progress with its Starship project, the stock is well below its $150 opening-day price. But if there is a market crash and SpaceX loses significant value, the stock would become much more attractive.

2. Intel

Intel is performing well. During the second quarter, the company’s revenue increased by 25% year over year to $16.1 billion, while its adjusted earnings per share came in at $0.42, well above the prior-year loss of $0.10 per share. The semiconductor leader is benefiting from soaring demand for its products. Intel is a leader in the server CPU (Central Processing Unit) market, which is growing rapidly due to the rise of AI agents.

Agentic AI is where the AI industry is headed next, or at least, that’s what some industry insiders believe. And since CPUs are critical to running AI agents, Intel is cashing in on this. The company may continue doing so for the foreseeable future. As Intel has argued, the semiconductor industry is now approaching a total addressable market of $1 trillion, largely driven by the AI boom and the growing demand for GPUs (Graphics Processing Units), which have been instrumental in training AI models.

But the advent of AI agents will significantly change the GPU-to-CPU ratio, from as much as about 8-to-1 to something closer to 1-to-1. The shift is still ongoing, and Intel has arguably just begun tapping into this opportunity. But there are several risks the company will have to face. Intel has had manufacturing issues in recent years and is still looking to improve on that front. It also has to contend with stiff competition from Nvidia(NASDAQ:NVDA) and Advanced Micro Devices(NASDAQ:AMD). Amid all that, the stock looks overvalued.

Intel is trading at 72.5x forward earnings, versus an average of 20.9x for information technology stocks. Intel is likely to post solid financial performances over the next few years, but the stock may not perform as well as it has recently from current levels. But if Intel’s shares decline significantly in a market crash, the stock may become attractive, provided its AI-related prospects remain intact. That’s why I’d seriously consider buying the stock in a downturn.

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Prosper Junior Bakiny has positions in Alphabet and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Intel, and Nvidia. The Motley Fool has a disclosure policy.