Is Applied Materials Stock Cheap Vs SpaceX?
Part 4 of our Applied Materials series. Start with part 1: Applied Materials Stock At $371: Why Is It Half Price?
One company makes the machines inside the factories that make the chips in your phone. The other launches rockets and beams internet to your phone from space. Over the last 12 months they brought in almost the same revenue: Applied Materials about $31 billion, SpaceX about $32 billion. Investors value Applied at about $310 billion and SpaceX at about $1.9 trillion.
That gap is a bet on the future, and many large portfolios now hold both bets through index funds. In a portfolio of a few million dollars, are you paying for growth you’ve checked? A Trefis partner firm can check it with you in a free 15-minute call.
What Explains A 6x Gap?
| Applied Materials | SpaceX | |
|---|---|---|
| Revenue, last 12 months | $31B | $32B |
| Price-to-sales | about 10.2x | about 59x |
| Analysts’ revenue, next fiscal year | $57B (FY2028) | $160B (2027) |
Investors pay SpaceX for revenue they expect to quintuple by the end of 2027. They pay Applied for a chip cycle they’re not sure lasts.
Is One Of Them Wrong?
Possibly both. SpaceX’s price only works if that forecast, $48 billion this year and $160 billion next, comes true; that would more than triple its sales in one year. Applied’s price assumes its forecast, $47 billion and then $57 billion, may not come true. One is priced for everything to go right, the other for something to go wrong.
Same sales, different stories. SpaceX is priced on a promise; Applied on a doubt. The doubted company has the lower bar to clear, but only if its forecast holds. Watch Applied’s report after Thursday’s close and SpaceX’s first full year as a public company.
What Should You Ask Next?
- Applied Materials Stock At $395: Can It Do What CoreWeave Did?
- Which big stocks expect faster growth but got cheaper this year?
- Earlier: Do Democrats help or hurt SpaceX stock at $135?
A promise and a doubt call for different position sizes. Get a second opinion on yours in a free 15-minute call with a Trefis partner firm.
For questions about this article or underlying research, email help@trefis.com.