"Better than SpaceX"...Wall Street is enthusiastic about Microsoft (MSFT), which has plunged 28%.

▲ SpaceX (SPCX), Microsoft (MSFT)/AI-generated image

An analysis suggests that while SpaceX (SPCX) is about to be included in the Nasdaq 100 index, there is a stronger buy candidate. The main character is Microsoft (MSFT), which has fallen 28% from its peak.

According to financial media outlet Nasdaq on July 5 (local time), SpaceX is expected to be included in the Nasdaq 100 index after the market closes on July 6. As funds tracking the index will have to buy SpaceX shares, the possibility of increased short-term demand has been raised. Keith Noonan, a writer for The Motley Fool, named Microsoft as a better buying opportunity than SpaceX.

Microsoft reported adjusted earnings per share of $4.27 and revenue of $82.89 billion in the third quarter of fiscal year 2026. This exceeded Wall Street's average forecasts of $4.06 EPS and $81.39 billion in revenue. Total revenue increased by 18% year-over-year, and Azure and other cloud services revenue grew by 40%.

Despite strong performance, the stock price fell 8% after the earnings announcement. The year-to-date decline is approximately 19%, and it is 28% lower than its all-time high. Microsoft's forward price-to-earnings ratio based on this year's estimated earnings also remains at around 20x.

Noonan acknowledged the risk that AI-centric startups could disrupt the existing enterprise software market. However, he assessed that there are few signs that Microsoft's core business is actually being impacted. He also drew a line at the judgment of lumping Microsoft, which has a strong foundation in technology, capital, and talent, into the same risk group as other specialized software companies.

SpaceX is facing the possibility of increased short-term stock demand due to its inclusion in the Nasdaq 100. Noonan evaluated Microsoft, whose stock price has fallen despite strong performance, as a more attractive portfolio candidate for long-term investors. Its business foundation secured in the AI and software markets and an estimated P/E ratio of approximately 20x were presented as key reasons.

[Article Summary]

-SpaceX is expected to be included in the Nasdaq 100 index after the market closes on July 6, and demand for its shares from index-tracking funds is anticipated.

-Microsoft's revenue of $82.89 billion and adjusted EPS of $4.27 exceeded Wall Street forecasts, but its stock price has fallen 28% from its all-time high.

-Keith Noonan evaluated Microsoft as a better buy candidate than SpaceX, citing its estimated P/E ratio of approximately 20x and its AI and software business foundation.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*