Is SpaceX a Better Buy Than the 2 "Magnificent Seven" Stocks It Has Surpassed in Market Cap?

The "Magnificent Seven" are some of the largest tech-focused companies by market cap: Nvidia, Alphabet, Apple, Microsoft, Amazon, Meta Platforms (NASDAQ: META), and Tesla (NASDAQ: TSLA).

But Space Exploration Technologies (NASDAQ: SPCX) is making the case for why the Magnificent Seven as a category may be outdated.

Although in its brief period on the public market, SpaceX briefly surpassed Microsoft and Amazon in market cap, the stock has since fallen by 31% from its intraday high. It closed at $154.60 per share on June 22 -- up just 3% from its opening trading price of $150.

Even so, its market cap of about $2 trillion clears Tesla at $1.5 trillion, and Meta Platforms at $1.4 trillion. SpaceX is now the seventh-most-valuable company in the world, behind Nvidia, Alphabet, Apple, Microsoft, Amazon, and Taiwan Semiconductor. But is the company sending shock waves across the market a better buy than Tesla or Meta Platforms?

Image source: Getty Images.

The case for SpaceX over Tesla

Tesla's profitability has taken a massive hit in recent years as sales growth in its electric vehicle and energy storage businesses has slowed. The company is no longer tethering its long-term growth to the passenger electric vehicle market. Tesla's $25 billion capital expenditure plan for this year is centered on its humanoid robots (Optimus), fully autonomous robotaxis (Cybercabs), the Tesla Semi, and its lithium refining and battery manufacturing infrastructure.

Meanwhile, SpaceX has a dominant share of the commercial space launch industry: It has been responsible for launching over 80% of the mass that the world has put into orbit each year since 2023.

SpaceX is also a major player in artificial intelligence, particularly after its merger with xAI earlier this year. That position will only expand with its $60 billion acquisition of Anysphere -- the maker of the AI coding tool Cursor -- which it announced last week. AI will likely be the main driver of SpaceX's near- to medium-term revenue growth. Analysts at Morgan Stanley forecast that SpaceX's revenue will hit $330 billion in 2030, and anticipate 57% of that will come from AI.

SpaceX has a bold plan to build a massive Gigasat factory in Bastrop, Texas, to produce AI data center satellites at high volume. About 100 miles away, SpaceX, Tesla, and Intel (NASDAQ: INTC) are collaborating on Terafab, which is expected to be the world's largest semiconductor fabrication plant. Terafab's goal is for its annual production capacity to eventually teach 1 terawatt (1,000 GW) of AI compute capacity -- although the project is still in the early stages, it is expensive, and it faces no shortage of supply chain challenges.

CEO Elon Musk has asserted that the ability to scale up an orbital constellation of AI data centers is mostly limited by a lack of AI computing hardware. This is why building Terafab is so critical to SpaceX's orbital data center plan.

If Tesla were still generating consistently high-margin free cash flow and had significantly more cash and cash equivalents on its balance sheet than debt, it would have a clear advantage over SpaceX. But with both companies spending full throttle in pursuit of big ideas, the better buy between them will really come down to which one's ideas will pay off enough to justify its high valuation.

Tesla's Cybercabs will face no shortage of competition from the autonomous ride-share offerings of Alphabet-owned Waymo and other self-driving vehicle companies. And its Optimus robots will have to compete with the designs of numerous established robotics companies like Boston Dynamics. By contrast, no rival comes close to being a true peer with SpaceX in the areas where it is pursuing its bold plans.

So if I had to choose between these two growth stocks, I would buy SpaceX over Tesla. But the best course of action for retail investors now may be to keep SpaceX on their watch lists until it shows measurable progress in large-scale manufacturing of AI satellites and compute, outlines the costs of launching these satellites (which will have many times the mass of its Starlink satellites), and addresses the light pollution consequences of keeping these AI satellites in sun-synchronous orbits, among other issues.

One of the best values on the market

Like SpaceX and Tesla, Meta is on a spending spree. Only in Meta's case, Wall Street doesn't like it. The Facebook parent has been the second-worst-performing Magnificent Seven stock year to date, ahead of only Microsoft.

Meta recently raised its 2026 capex budget to a range of $125 billion to $145 billion. The top of that range is roughly double the $72 billion it spent in 2025. With capex growing faster than revenue, Meta's profitability and margins will further compress, which may concern some investors, especially considering that Meta's spending is mainly on AI data centers for its internal use rather than to lease to external customers.

This is a fundamentally different approach than the strategies of hyperscalers like Amazon, Microsoft, and Alphabet -- which are cloud providers with clear blueprints for monetizing their AI infrastructure investments. So investors will want to see how Meta can deliver a clear return on investment from its AI spending, such as through increased advertising revenue or higher levels of engagement on Instagram, Facebook, Messenger, and WhatsApp.

Meta has yet to prove that its AI investments are worth the price. What's more, Meta has a history of pouring money into projects that don't have a clear path to profitability. After all, Facebook changed its name to Meta Platforms in 2021 because it thought the metaverse would be the next big thing. The company's Reality Labs segment is responsible for its research and development in the metaverse, augmented and virtual reality, and it makes products like the Meta Quest virtual reality headset. Between 2021 and 2025, Reality Labs reported a net operating loss of $77 billion.

Even with Meta's arguably excessive spending and the poor track record of its Reality Labs unit, it's still a better buy than SpaceX or Tesla right now. Meta is simply too cheap to ignore, sporting a forward price-to-earnings ratio of just 17.9.

TSLA PE Ratio (Forward) data by YCharts.

For context, the S&P 500 (SNPINDEX: ^GSPC) has a forward P/E of 22.5.

SpaceX and Tesla could outperform Meta over the ultra-long term, but their bold bets could also backfire. In contrast, Meta doesn't need to actively spend on AI to be a cash cow.

Daniel Foelber has positions in Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Intel, Meta Platforms, Microsoft, Nvidia, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool has a disclosure policy.