Space Exploration Technologies (SPCX -2.50%) has been one of the hottest stocks on Wall Street in the past two months. The company’s work with reusable rockets has revolutionized space travel, and its artificial intelligence (AI) ambitions may be even more promising. However, SpaceX is an expensive stock with a market cap of nearly $2 trillion, despite generating just $7.8 billion in revenue in its latest quarter and being unprofitable.
The market is betting on the company’s massive long-term opportunities across space travel and other areas, but any setback may send the stock down significantly. SpaceX is a risky stock, and there are lots of other companies investors should consider before it. Here are two examples: Intuitive Surgical (ISRG +1.52%) and Veeva Systems (VEEV +3.22%).
Image source: The Motley Fool.
1. Intuitive Surgical
Intuitive Surgical has significantly underperformed the market this year. Its financial results haven’t been particularly impressive, especially given that the rollout of its newest da Vinci 5 system is putting pressure on margins. That’s before we consider the impact steep tariffs are having on its financial results and the increased competition it faces from healthcare leaders such as Medtronic (MDT +2.21%) and Johnson & Johnson (JNJ +3.15%).
However, the stock may be a great buy on the dip. Intuitive Surgical remains the undisputed leader in the robotic-assisted surgery (RAS) market thanks to its da Vinci system. The company ended the second quarter with an installed base of 11,710, an increase of 12% year over year.
Today’s Change
(1.52%) $5.95
Current Price
$396.28
Key Data Points
Market Cap
Day’s Range
$392.26 – $399.87
52wk Range
$328.57 – $603.88
Volume
1.4M
Avg Vol
3.1M
Gross Margin
66.66%
Intuitive Surgical’s da Vinci 5 is helping boost that metric, and it could pay for itself down the road. The da Vinci 5 boasts new features, such as the Force Feedback Technology, which allows surgeons to gauge the pressure instruments apply to patients’ tissues during procedures, helping them avoid injuries and potentially improving patient outcomes.
As Intuitive Surgical has argued, the da Vinci 5 is driving greater utilization among surgeons. In the long run, that means higher procedure volume and more revenue from instruments and accessories. But what about the competition? The RAS market is arguably underpenetrated. There is a vast growth runway remaining in the industry.
Also, Intuitive Surgical benefits from a wide moat thanks to switching costs, which may allow the company to maintain its top position for the foreseeable future. The stock may have declined significantly this year, but given its attractive prospects in the RAS market, it looks like a steal at current levels.
2. Veeva Systems
Veeva Systems, a Software-as-a-Service company, spent most of the first half of the year being dragged down along with the rest of the industry, as many investors believe that AI will render many of the products software companies offer obsolete. However, Veeva Systems has bounced back over the past couple of months, partly because of strong financial results.
In the first quarter of its fiscal year 2027, ended April 30, Veeva Systems’ revenue increased by 16% year over year to $882.9 million. The company’s adjusted earnings per share jumped almost 14% year over year to $2.24. Veeva Systems’ recent financial performance shows it can coexist with AI. The company launched Veeva AI, which helps its customers automate tasks and boost productivity thanks to AI agents.
Today’s Change
(3.22%) $7.68
Current Price
$246.02
Key Data Points
Market Cap
Day’s Range
$241.72 – $247.03
52wk Range
$148.05 – $310.50
Volume
986.8K
Avg Vol
2.3M
Gross Margin
74.79%
Veeva Systems’ AI services — like the rest of its products — are catered to the life sciences industry. That’s how the company made its name and carved out a niche in the large and competitive cloud computing industry. Veeva launched its cloud solutions with the unique demands and needs of pharmaceutical companies — and those of other players in the sector — in mind. As a result, it has become a leader in its niche.
The company also benefit from a strong moat thanks to switching costs, as its clients rely on its services for critical day-to-day activities. They need a strong incentive to switch to a different provider. Meanwhile, Veeva Systems still has a large addressable market, which it estimates at $20 billion. That will only increase, along with the rest of the healthcare sector, in the long run. That puts Veeva Systems in a strong position to post consistently growing revenue and earnings over the long term, while delivering excellent returns.
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