Key Points
Space Exploration Technologies Corp (SpaceX) went public on June 12, 2023, and initially peaked at $218 per share. However, the stock has struggled, closing at $185 as of June 18, 2023. With a market cap of $2.8 trillion and trailing-12-month revenue of $19.3 billion, it holds an exorbitant price-to-sales ratio of 145, significantly higher than the Nasdaq-100 technology index.
In contrast, Microsoft is positioned for growth in artificial intelligence, featuring a user-friendly AI assistant, Copilot, embedded in its software products. The company operates over 1.6 billion monthly active devices globally, and as of March 31, 2023, it had added Copilot to 20 million enterprise licenses, a 250% year-over-year increase. Microsoft Azure’s revenue grew by 40% in Q3 2023 and has a staggering order backlog of $627 billion, expected to drive future growth.
Microsoft stock currently trades at a price-to-earnings ratio of 22.5, well below its 10-year average of 32.7 and compared to the Nasdaq-100’s 34.4, suggesting it is undervalued. With demand for its AI capabilities and cloud services on the rise, analysts believe Microsoft may present a better investment opportunity than SpaceX.
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