3 Stocks That Look Like Far Better Long-Term Investments Than the SpaceX IPO

The Space Exploration Technologies (NASDAQ: SPCX), or SpaceX, IPO has captured a lot of attention, with many investors focused on what it could do in the future. While that's an exciting proposition to consider, several companies have a fairly well-established future, and it's quite bright.

One industry I'm bullish on over the long term is cloud computing, and I think these three cloud titans all make for better long-term investments than SpaceX, as there is defined upside for this trio.

Cloud computing is thriving from the rising demand for AI

The big three cloud computing providers are Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT), and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), listed in order of the size of their cloud businesses. Amazon Web Services (AWS), Microsoft Azure, and Alphabet's Google Cloud are all established and highly profitable business units that operate on a fairly simple principle.

Cloud computing isn't a complex business model, even if the technology is. Essentially, it involves building data centers, installing computing equipment, and renting out the resulting computing capacity via the cloud.

Cloud computing has become an excellent way to easily scale computing needs up or down and to offload expensive, rapidly depreciating, short-lived computing equipment to cloud providers. Cloud computing has also become the primary way AI start-ups get access to the computing power they need.

Furthermore, all three companies are spending heavily on data centers this year. At the start of the year, the big four AI hyperscalers, including this trio and Meta Platforms (NASDAQ: META), estimated they would spend around $650 billion on data center capital expenditures in 2026. Next year, Nvidia (NASDAQ: NVDA), a major computing equipment supplier to this cohort, estimated that this figure would exceed $1 trillion. That's a huge gain, and it's fantastic news for investors.

Amazon CEO Andy Jassy noted in his annual shareholder letter that the faster a cloud company grows, the more it must spend to sustain and capture that growth. With record-setting demand and build-outs currently underway, don't be surprised when this trio sees its revenue skyrocket over the next few years. That will lead to solid long-term gains and make each of these stocks an intriguing buy, especially when compared to SpaceX.

All three stocks are trading at a reasonable price tag

There are several ways to analyze a business, but for companies that have an elevated capital expenditure cycle, using operating cash flow is a smart way to value the business. It strips out capital expenditures and one-time effects, such as tax effects or investment gains, and focuses only on how much cash a business generates.

From this standpoint, Amazon and Microsoft both look historically cheap, while Alphabet is a more expensive, but still well within a reasonable range.

MSFT Price to CFO Per Share (TTM) data by YCharts

In 2025, SpaceX's preferred cash flow metric is adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), which isn't quite the same as operating cash flow and is far more optimistic. However, it's the best investors have. In 2025, it generated $6.6 billion in adjusted EBITDA. By dividing its current market cap of $2.5 trillion by this metric, investors get a price-to-adjusted EBITDA ratio of 379.

That's far higher than the levels these cloud giants are trading around, and it shows that these three can be purchased at a reasonable price, while SpaceX must grow into its valuation before seeing further upside. That makes me prefer these three cloud titans to SpaceX, and I think all three will easily outperform SpaceX over the next decade.

Keithen Drury has positions in Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.