2 Tech Stocks I Would Buy Before SpaceX
Key Points
SpaceX isn't profitable yet, and shares are likely to be expensive.
Alphabet owns several leading businesses and continues to report strong growth.
Taiwan Semiconductor Manufacturing makes chips for all kinds of technology, providing it with growth opportunities at all times.
- 10 stocks we like better than Alphabet ›
The SpaceX initial public offering (IPO) is finally happening next week, and the market can't get enough of it. The potential for space exploration is truly astounding, and investors are eager to capitalize on it.
However, if you dig a little deeper, SpaceX might not be the best investment for most investors right now. It's losing money, and shares are likely to be very expensive when they start trading on the market.
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I would keep SpaceX on my watch list, which shouldn't be too hard, considering it's likely to take up a lot of airtime in the coming years. But if I wanted to buy a great tech stock today, I'd consider Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) and Taiwan Semiconductor Manufacturing (NYSE: TSM).
Image source: Getty Images.
1. Alphabet
Alphabet is mostly known for the Google search engine, which has a massive lead in the industry, accounting for 90% of search engine traffic. That's the kind of economic moat that is nearly impenetrable, at least in the short term. Powered by Gemini, the company recently rolled out artificial intelligence (AI) summaries and AI mode, neatly stepping around what was a perceived threat from new large-language models.
What makes Alphabet even more compelling is its diversified revenue streams. Not only is it tops in search engine, but it also owns an array of leading businesses including YouTube and Android. These varied businesses provide it with multiple revenue sources and hedge it against potential downturns in any one of them.
The proof is in the results. Revenue is still growing by double digits, up 22% year over year in the first quarter if 2026, with a 63% increase in cloud services. Operating margin expanded by 2 full percentage points to 36.1%, and net income was up 81%.
It doesn't hurt to know that Warren Buffett started a position in Alphabet for Berkshire Hathaway before he left the CEO role at the beginning of the year, and that current leader Greg Abel just tripled the company's position.
2. Taiwan Semiconductor
Taiwan Semiconductor, or TSMC, is the largest semiconductor fabricator in the world and has partnerships with most global chip designers, including Nvidia and Apple. It recently expanded into the U.S. with the first of several facilities opened in Arizona, and it's investing in its capabilities to address soaring demand.
What I find so compelling about TSMC is that it benefits from whatever is trending in technology. Today, that's AI, and the high-performance computing segment is driving growth right now. But it also has smartphone, auto, and other smaller segments. If technology changes, whether to new kinds of AI or to anything else, the companies making the chips are likely to continue to partner with it.
Another standout feature is that for a non-services company, TSMC is extremely profitable. Revenue increased 41% year over year in the 2026 fiscal first quarter, while gross margin expanded by 7.4 percentage points to 66.2% and operating margin expanded by 9.6 percentage points to 58.1%.
Taiwan Semiconductor gives investors exposure to AI while reducing the risk of being a pure-play AI company, and it has fantastic long-term opportunities.
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Jennifer Saibil has positions in Apple and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet, Apple, Berkshire Hathaway, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
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