1 Massively Undervalued Artificial Intelligence (AI) Stock That Could Be Worth More Than SpaceX Within 12 Months

Space Exploration Technologies (NASDAQ: SPCX), better known as SpaceX, has rocketed higher from its initial public offering. At one point, it was the fifth-most valuable publicly traded company. And while the stock has eased back from its peak, the market still values the company at around $2.2 trillion as of this writing.

Indeed, there's no shortage of investor excitement for SpaceX. The massive company includes businesses across rocket launch services, satellite internet and connectivity, artificial intelligence (AI), and cloud computing. (It's also the owner of X, formerly Twitter.) The biggest opportunity for the company appears to be in artificial intelligence, which SpaceX management says represents a $26.5 trillion market.

But another company may be able to capitalize on that opportunity even better. That company is currently worth about two-thirds as much as SpaceX, but I predict their positions will reverse within 12 months. Here's why.

Image source: Getty Images.

Where does SpaceX head from here?

SpaceX was one of the most anticipated IPOs in recent history, and the combination of high market interest and a low initial float helped propel the stock higher in the first few days of trading. But investors expecting the stock to remain elevated could be in for a bumpy ride.

The track record for IPOs in general isn't very good. Not only have stocks historically underperformed the market on average in the years that followed the close of their first trading days, but their performance has also worsened in recent years. Since 2011, the average IPO stock has delivered a one-year return of negative 1.7% following its first close. In each of the last four years, however, that negative average return has fallen into double-digit percentage territory.

A couple of other factors are also working against SpaceX's stock price.

First, the company's valuation is extremely high. It trades for well over 100 times its sales at its share price as of this writing. While it's expected to grow sales quickly this year, thanks in large part to a couple of deals to lease compute power to Anthropic and Alphabet, it will need to grow its top line at an unprecedented rate for a company of its size over the next five to 10 years to justify its current valuation.

CEO Elon Musk seems to think that's within the realm of possibility. He said SpaceX could generate $1 trillion in revenue as soon as 2030 in a post on X that he later deleted. Based on Musk's track record of excessive optimism about timelines, investors should take that prediction with a big grain of salt.

The second challenge for the stock is that a large number of shares will enter the market over the next 12 months. SpaceX's IPO only issued about 4% of the total SpaceX shares. As a series of lockup periods expire, many of the company's early investors will likely look to liquidate some or all of their holdings, putting some selling pressure on the stock.

As such, I expect SpaceX will trade lower than its current valuation 12 months from now. There's a much better AI opportunity for investors in today's market, and it's currently worth about $800 billion less than SpaceX, with an incredibly attractive valuation.

The stock that could be worth more than SpaceX within 12 months

While SpaceX sees an incredibly large opportunity in AI, Meta Platforms (NASDAQ: META) is poised to actually produce significant financial gains from continued advancements in AI technology. The market appears to be undervaluing that opportunity today, making the stock a great buy for long-term investors.

AI is at the core of everything Meta does. Algorithmically curated content and ad targeting drive engagement and monetization. And recent investments have produced excellent results on both ends. Meta's ad revenue climbed 33% in 2026's first quarter, accelerating from 24% growth in the previous quarter and 22% growth in 2025.

During the Q1 earnings call, management highlighted improvements to its AI systems that drove both increased time spent, particularly on video, and higher conversion rates for advertisements. Overall, integrating large language model (LLM) capabilities, such as the ability to understand what content is about rather than relying on rote machine learning models, has produced significant gains. And management says there's still plenty of room to improve both engagement and ad conversions.

AI also opens new opportunities for Meta. It's developing its personal AI assistant, Meta AI, which it could monetize via ads or subscriptions. It's also testing Business AIs in WhatsApp, which makes it easy for small businesses to handle customer support and sales via Meta's messaging apps. It's using AI to expand available content through auto translation and dubbing. Ultimately, AI-generated or AI-assisted content could create feeds tailored to each user on Meta's platforms.

Despite its strong revenue growth, investors' concerns about Meta's massive planned outlays on AI infrastructure have held the stock back. It expects capex of $125 billion and $145 billion in 2026, up from about $72 billion last year.

Yet management is guiding for operating income to continue to climb despite that higher spending. The stock currently trades for about 17 times forward earnings expectations. That looks incredibly undervalued relative to the business's continued growth and the opportunities ahead. I don't think it will be long before the market changes its view on Meta stock and sends its value higher, while SpaceX stock declines.

Adam Levy has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.