3 Stocks That Look Like Far Better Long-Term Investments Than the SpaceX IPO
Written by Keithen Drury for The Motley Fool -> Amazon, Microsoft, and Alphabet each have thriving cloud computing wings. All three stocks are priced far lower than SpaceX. The Space Exploration Te
Amazon, Microsoft, and Alphabet each have thriving cloud computing wings. The Space Exploration Technologies (NASDAQ: SPCX) , or SpaceX, IPO has capt
Read Full Story at Nasdaq News →Why This Matters
The comparison between SpaceX and cloud computing giants underscores a critical inflection point in the valuation of high-growth private companies versus established public tech leaders. While SpaceX captures headlines with its space race narrative, Amazon, Microsoft, and Alphabet offer unmatched stability and scale in a sector where infrastructure wins long-term. Investors may be overlooking the compounding advantages of cloud dominance—recurring revenue, sticky customer bases, and defensive moats—in favor of the allure of disruptive innovation.
Background Context
Cloud computing emerged as a cornerstone of the digital economy during the 2010s, with the three dominant players—AWS, Azure, and Google Cloud—transforming IT spending from capital-intensive hardware to scalable, subscription-based services. SpaceX, though revolutionary in aerospace, operates in a capital-intensive, cyclical industry where profitability remains elusive despite breakthroughs. Meanwhile, the cloud trio has delivered consistent earnings growth and cash flows, even during economic downturns, a track record that SpaceX cannot yet match.
What Happens Next
The next phase of competition will hinge on AI integration, where cloud providers leverage their infrastructure to monetize generative AI workloads—a market SpaceX is only beginning to explore. Regulatory scrutiny on Big Tech’s cloud dominance could reshape the landscape, while SpaceX’s expansion into satellite internet (Starlink) and point-to-point transport may diversify its revenue streams but also introduce new operational risks. Watch for earnings reports from these cloud players in Q3 2024, as guidance on AI adoption could signal whether their premium valuations are justified.
Bigger Picture
This divergence highlights a broader shift in investor preferences toward predictable, high-margin businesses over speculative growth plays, even in tech. The cloud wars are not just about revenue growth but about locking in enterprises for decades through data gravity—a dynamic that SpaceX’s hardware-centric model cannot replicate. As AI becomes the next major cloud workload, the gap between these public incumbents and private disruptors may widen further, reinforcing the case for stability over disruption.
