SpaceX Plunges 5%, Falling Below Amazon's Market Cap. Which Growth Stock Is the Better Buy Now?

After its record-shattering initial public offering (IPO) last week, Space Exploration Technologies (NASDAQ: SPCX) stock is worth $2.4 trillion. It briefly moved ahead of Amazon (NASDAQ: AMZN) to become the fifth-most-valuable company in the U.S., but it then fell back into sixth place.

Which one of these growth stocks is the better buy?

Image source: Amazon.

It looks like Amazon

According to nearly any comparable metric, Amazon easily looks like the better buy. It's vastly bigger, with $717 billion in 2025 revenue, versus $18.7 billion for SpaceX, and Amazon is still growing by double digits. SpaceX is growing somewhat faster on a percentage basis, but the discrepancy in total size makes that appear less impressive.

Amazon is also extremely profitable, with $80 billion in operating income last year, compared to SpaceX's $2.6 billion operating loss.

Amazon has a huge market opportunity between e-commerce, cloud computing, and its other businesses, and it's the top player in its two core segments. SpaceX is the leader in rocket launching and satellite broadband, and it's working on its artificial intelligence (AI) business. Most of what SpaceX describes as its addressable market is in AI enterprise applications, which might apply to Amazon as well.

Amazon is a known, proven operator with a track record of creating shareholder value. SpaceX is an unknown entity with a lot of hype, and a CEO who owns 85% of the company and has full voting rights.

Finally, Amazon is much cheaper than SpaceX, trading at a price-to-sales ratio of 3.6, versus 125 for SpaceX.

To me, at least, Amazon stock is the better growth stock to buy right now.

Why is the market so excited about SpaceX?

If it's that clear, why is it even a question? And why was the SpaceX IPO oversubscribed even as it became the largest IPO ever?

There's one area where SpaceX stands out, and that's opportunity. SpaceX investors believe management when it says, "We believe we have identified the largest actionable total addressable market in human history." They believe in Elon Musk's vision of multiplanetary existence and everything that comes with that: space travel, living on Mars, and more.

However, believing in that and risking your hard-earned money on these initial stages are two different things. There's a strong possibility that SpaceX stock is going to fall at some point, and there's a long road until it starts to come through on most of its goals, as well as turn a profit. There's time to decide that it's a good investment, and in the meantime, Amazon stock is the better buy.

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.