SpaceX’s initial public offering on June 12 has already marked a sharp pullback, with the company’s shares falling about half from their peak and closing just above $108 on July 31, according to the article. Despite the decline, SpaceX still carries a very large market capitalization, and investors continue to weigh how quickly its relatively recent revenue base can justify current valuations.
At the same time, the focus in the technology complex has turned to Microsoft, where the article argues that progress across cloud and enterprise AI is translating into improving growth momentum—an outcome that, in its view, leaves the stock looking cheaper on key valuation measures than high-flying peers.
Key takeaways
- Price move: SpaceX shares surged to a peak of $225 shortly after debut, then roughly halved to close just above $108 on July 31.
- Catalyst: The selloff is tied to valuation concerns following the June 12 IPO, while Microsoft’s momentum is linked to accelerating demand for Azure and growing uptake of Copilot for 365.
- Key implication: The article suggests investors may find more favorable risk-reward outside SpaceX given its reported price-to-sales ratio, while Microsoft’s business drivers appear to be strengthening.
- Valuation contrast: Microsoft is described as trading at a lower price-to-earnings multiple versus its own five-year average and below the Nasdaq-100 on the same metric.
What drove the move in SpaceX’s trading
Space Exploration Technologies, which operates across space transportation, satellite connectivity, and AI infrastructure, went public on June 12, the article said. Shares rallied quickly to a peak of $225 before retracing. By the July 31 close, the stock had given back about half of its peak value.
Even with the decline, the article emphasizes that SpaceX remains expensive based on fundamental scaling. It cited trailing four-quarter revenue of $19.3 billion and pointed to a price-to-sales ratio of 74. The article also compares that valuation to the Nasdaq-100 technology index, describing SpaceX as nearly 12 times as expensive on that measure.
From an investor perspective, the central issue raised is whether near-term revenue growth can catch up with expectations embedded in current valuation. The article concludes that the setup leaves room for additional downside, even after the post-IPO drawdown.
Azure momentum and enterprise AI adoption at Microsoft
While SpaceX grapples with high valuation optics, Microsoft’s operating storyline is centered on Azure and the enterprise AI stack, according to the article. It describes Azure as a cloud platform with a large set of services and as an increasingly important distribution channel for tools used to build and deploy AI applications.
The article connects AI software development to underlying data center compute. It argues that many businesses are unlikely to build dedicated infrastructure themselves, instead opting to rent capacity—creating a demand pipeline for providers like Azure.
On capacity expectations, the article cites Microsoft’s 2026 fiscal year order backlog from customers waiting for additional Azure data center capacity. It said the backlog totaled $678 billion and represented an 84% year-over-year increase. The company also built 88 new data centers worldwide over the prior 12 months as part of a two-year plan to double its infrastructure footprint, the article added.
For the software layer, the article highlights Azure Foundry, which it says helps enterprises pair data center compute with a library of more than 11,000 large language models from developers including OpenAI. The implication in the piece is that Microsoft’s tooling can lower friction for companies seeking to develop AI agents, chatbots, and other applications.
Growth indicators presented in the article include that Azure’s total annual revenue surpassed $100 billion for the first time in fiscal 2026. It also said the platform posted 43% year-over-year growth in the fourth quarter, marking a second consecutive quarter with an accelerating growth rate—an element the article frames as evidence of strengthening momentum.
Copilot for 365 usage accelerates
The article also points beyond Azure to Microsoft’s Copilot strategy across its established software portfolio. It says Copilot has been integrated into Windows, Bing, Edge, and the Microsoft 365 productivity suite.
According to the article, as of June 30, companies worldwide were paying for 30 million Copilot for 365 licenses. That figure is described as a 50% increase from March 31, a three-month period. The piece notes that this number remains a fraction of the broader Microsoft 365 installed base, since companies pay for more than 400 million 365 licenses for employees—positioning Copilot as an upgrade opportunity as adoption expands.
In addition, the article argues Microsoft has a commercial advantage versus pure-play AI companies that may need to win customers from scratch, because Microsoft can market Copilot through products where users already spend time.
Why the article views Microsoft as attractively valued
Despite acknowledging a strong recent move, the article argues that Microsoft still appears attractively priced. It said Microsoft shares rose 15% on July 30, the first trading day after the company reported its fiscal 2026 results. Still, it states Microsoft trades at a price-to-earnings ratio of 25.1 based on annual earnings of $17.65 per share, described as a 21% discount to the stock’s five-year average P/E of 32.3.
The article also compares Microsoft to the Nasdaq-100, saying the index trades at a P/E ratio of 33.1. On price-to-sales, it claims Microsoft’s P/S multiple is 10.1 and contrasts that with SpaceX’s 74, concluding that Microsoft is dramatically cheaper on this metric.
The overarching takeaway is that even after Microsoft’s rally, investors may see more upside relative to SpaceX due to the combination of reported growth drivers and valuation that the article characterizes as less stretched.
What to watch next
For investors weighing both stories, the next signal is whether Azure backlog and AI infrastructure plans translate into sustained revenue growth, and whether Copilot license expansion continues to accelerate. Near-term catalysts likely center on upcoming quarterly results and guidance updates from Microsoft, alongside any post-IPO pricing and fundamentals disclosures from SpaceX as the market tests how quickly revenue growth can scale to match valuation expectations.
