Which Hot Growth Stock Is The Better Buy Right Now: Micron or SpaceX?

When it comes to buzz factor, two companies stand out right now: Micron Technology (NASDAQ: MU) and Space Exploration Technologies (NASDAQ: SPCX). Micron's share price has skyrocketed more than 9x over the past 12 months. SpaceX recently set the record for the biggest initial public offering (IPO) ever, with a market cap of roughly $1.8 trillion right out of the gate.

Both Micron and SpaceX are benefiting from huge tailwinds. But they have very different stories for investors. Which of these hot growth stocks is the better buy right now?

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Micron vs. SpaceX

Micron's sizzling returns are due to the ongoing surging demand for memory chips. The company can't produce enough of its high-bandwidth memory (HBM) to meet customer demand. HBM is a critical component for data servers running artificial intelligence (AI) applications. As Micron CEO Sanjay Mehrotra stated in March, " AI hasn't just increased demand for memory -- it has fundamentally recast memory as a defining strategic asset in the AI era."

But HBM isn't the only positive for Micron these days. The company is also delivering record sales for its DRAM and NAND memory chips. Again, AI is the primary growth driver, with AI demand expected to top 50% of the total addressable market in 2026 for DRAM and NAND used in data centers.

Granted, Micron isn't the only key memory supplier. Samsung and SK Hynix are formidable rivals. However, the market is currently large enough for all three players to flourish. Also, Micron is the only U.S.-based memory giant -- a distinction that gives it a competitive advantage in some cases.

Meanwhile, SpaceX dominates the satellite internet service market with its Starlink unit. The company is also a leader in space launches, thanks to its reusable Falcon 9 rockets and its newer Starship spacecraft, designed to transport humans and cargo.

SpaceX thinks its biggest opportunity, though, is in AI. Founder Elon Musk merged one of his other companies, xAI, into SpaceX earlier this year. SpaceX estimates its total addressable market at a staggering $28.5 trillion. Enterprise applications (xAI's bailiwick) account for $22.7 trillion of this total.

Two distinguishing factors that immediately jump out with these two stocks are their financial positions and valuations. Micron is highly profitable, and its earnings continue to soar. It also looks attractively valued, with shares trading at roughly 10.5 times forward earnings. SpaceX remains unprofitable for now, so earnings-based valuation metrics aren't applicable. However, the stock's trailing 12-month price-to-sales ratio is 125, a nosebleed level by any stretch of the imagination.

No contest

My personal view is that there really isn't a contest between these two stocks. Micron is the better pick to buy right now -- and it isn't even close.

Sure, Micron is a cyclical stock, with all the risks that come with that status. However, the company is enjoying a strong up cycle that shows no signs of slowing down. SpaceX offers an exciting story. It may even deliver greater long-term returns. For now, though, Micron provides a much more compelling risk-reward proposition.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.