Is SpaceX a Better Buy Than Amazon?

It took Amazon (NASDAQ: AMZN) about 27 years as a publicly traded company to reach a market cap of $2 trillion. Space Exploration Technologies (NASDAQ: SPCX) got to that milestone in about a week. In fact, SpaceX briefly overtook Amazon as the fifth-largest corporation on the market, although as of this writing, the e-commerce specialist is back ahead. Clearly, many investors have incredibly high hopes for SpaceX, but is the aerospace manufacturer a better buy than Amazon? Let's find out.

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SpaceX is shooting for the moon

SpaceX may be a newbie on equity markets, but the company is well-known within its industry and has helped revolutionize space travel by pioneering reusable rockets. SpaceX dominates this field. In 2025, it had more successful orbital launches (by a mile) than any of its competitors. That said, SpaceX's most profitable business isn't space travel. That title goes to Starlink, which provides high-speed broadband through a network of Low Earth Orbit satellites.

As of March 31, Starlink had 10.3 million subscribers, up 106% year over year. And last year, SpaceX recorded $11.4 billion in connectivity revenue, which accounted for almost 61% of its top line. It was also the only one of SpaceX's segments that was profitable; it generated an income from operations of about $4.4 billion, more than doubling compared to the year-ago period.

SpaceX has high hopes for its connectivity business, where it estimates a $1.6 trillion total addressable market that dwarfs its current revenue. Further, the company's two other segments -- space and artificial intelligence (AI) -- could also eventually contribute meaningfully to the bottom line. SpaceX is working on a next-gen, fully reusable rocket that could help it significantly boost profits and margins within its space business. SpaceX is also investing heavily to scale its AI infrastructure business.

The company sees an even larger opportunity in AI, which it estimates at $26.5 trillion. SpaceX may not be consistently profitable, but its innovative qualities, aggressive vision for the future, and large addressable market may allow the stock to deliver life-changing returns over the long run.

Don't underestimate Amazon

Amazon has lagged the S&P 500 over the past 12 months, but the company's prospects remain attractive. Though it has helped pioneer industries such as e-commerce and cloud computing, there is still a large addressable market for the tech leader in both, and it has established a wide moat thanks to its brand name, network effects, and switching costs.

Amazon is actively seeking ways to improve profitability, notably by deploying AI-powered robots in its warehouses to boost efficiency and cut costs. E-commerce remains Amazon's largest source of sales, but this business has low margins. That could change over the next decade thanks to the company's ongoing efforts. Amazon's bottom line will also benefit from the company's ramp-up of its high-margin advertising business.

Further, Amazon is constantly tapping into new growth opportunities. Earlier this year, it announced that it would open up its logistics network to other corporations through a new initiative called Amazon Supply Chain Services (ASCS). The company is also apparently in talks to sell its Trainium custom AI chips. They may not be as versatile as the market-leading GPUs (Graphics Processing Units), but they are highly performant for specific AI workloads and are more cost-effective than comparable GPUs.

That's why this could be a highly successful initiative for Amazon. In short, Amazon generates consistent revenue, earnings, and cash flow, and has attractive long-term growth avenues and a strong competitive edge. All of these factors make the stock a great pick for investors.

Which is the better buy?

If we just focus on both companies' financial results, there is no contest between the two: Amazon is the winner by a wide margin.

SPCX Revenue (Annual) data by YCharts

However, the market is valuing SpaceX at levels similar to Amazon because, if the former's master plan comes to fruition, it will generate incredible returns. But it's important to remember that the company could face significant roadblocks, including mounting competition. SpaceX is also subject to significant regulatory and geopolitical risks given its reliance on government contracts for revenue. Any kink in the company's armor could trigger a sell-off, considering the high expectations the market has already placed on SpaceX.

Those comfortable with the risk and volatility, and who believe that Elon Musk, the CEO of SpaceX, can successfully steer the company toward its goals, should definitely opt for SpaceX over Amazon. More skeptical investors would be better off picking Amazon. The e-commerce leader has a reliable business that is less risky than SpaceX, and still looks likely to generate outstanding returns over the long term.

Prosper Junior Bakiny has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.