SpaceX vs Palantir Stock: 1 May Offer You a Significantly Bigger Gain, According to Wall Street.

Space Exploration Technologies (NASDAQ: SPCX) and Palantir Technologies (NASDAQ: PLTR) have each offered investors gains, but across different timeframes. SpaceX launched its initial public offering, the world's biggest, and made its market debut on June 12. From its opening price of $150, it's climbed 23%. As for Palantir, it's benefited from investors' interest in artificial intelligence (AI) stocks in recent years. Over the past three, it's soared more than 600%.

These companies may continue to benefit from the AI boom -- it's key to remember that even though SpaceX's name refers to space-oriented business, the company also has an AI unit. Will Palantir and SpaceX both offer you explosive returns in the year to come? Not necessarily. One of these stocks might deliver a significantly bigger gain than the other, according to Wall Street. Let's check out the details, starting with a look at each business.

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SpaceX's exciting launch

As mentioned, SpaceX recently completed an exciting launch, but this time, I'm not talking about rockets. Instead, I'm talking about the market debut that, raising $75 billion, represented the biggest IPO ever -- that amount later reached $85.7 billion after underwriters exercised an overallotment option.

SpaceX, as its name implies, has a significant rocket launch business, and in fact, completed more launches last year than any of its peers. Later this year, the company may reach an important milestone, with Starship delivering payloads into orbit for the first time. This fully reusable rocket -- the world's first -- aims to decrease costs by 99% from historical levels.

Starship plays an important role in the successes of SpaceX's other units -- connectivity and AI -- because it could transport their materials beyond Earth. For example, Starship could be a crucial part of the AI business' goal to develop data centers in space.

But to accomplish all of this, SpaceX must spend heavily, as we saw in the latest earnings report. Last year, capital expenditures totaled $20 billion, surpassing the company's $18 billion in total revenue, and bringing the company to a net loss.

Palantir as an early AI winner

Palantir already is a highly profitable company. The software player offers its customers platforms that help them aggregate and make better use of their data. This can result in key decisions, reorganized workflows, and better strategies -- as a result, a customer's earnings may significantly benefit from their use of Palantir's platforms.

The company serves government and commercial customers, and revenue in both of these areas has been soaring quarter after quarter. The commercial customer represents a particularly interesting growth driver since Palantir's launch of its Artificial Intelligence Platform (AIP) a few years ago. AIP allows customers, eager to get in on the AI opportunity, to easily and immediately apply AI to their needs. As a result, U.S. commercial customers have grown from a handful about five years ago to 615 in the latest quarter, for a 42% increase year over year. Importantly, this shows growth but also allows for plenty of room to run.

Palantir also has been successful balancing its growth with profit as we can see through its Rule of 40 score of 145%. A score of 40% or higher is considered positive, so Palantir clearly is winning here.

What does Wall Street say?

Both of these companies look exciting, though SpaceX clearly involves more risk. This is because the industrial and tech giant still must invest significantly to reach its goals, delaying profitability. Meanwhile, many of SpaceX's goals rely on technology that hasn't yet been proven -- this, too, represents risk.

A look at Wall Street's average price forecasts for the coming 12 months shows expectations for Palantir to advance 40% and SpaceX to add 1%. So, Wall Street sees potential for Palantir -- and earnings growth supports this idea. But SpaceX stock may have reached its potential -- at least over the coming year.

Of course, the average Wall Street forecast isn't always spot on. But SpaceX's trillion-dollar valuation, along with its lack of profitability and high capex trends, suggests that the stock may be overvalued right now.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.