It might seem like a risky time to buy more stocks. The S&P 500 looks historically expensive at nearly 30 times earnings, and the intensifying geopolitical conflicts could drive investors from stocks toward more conservative investments.
Yet if you can look past those near-term headwinds and plan to hold your stocks for at least a few more years, there are still plenty of bargains that deserve your attention. I believe two of those stocks -- Alibaba (BABA 1.67%) and Intuitive Machines (LUNR 4.07%) -- could easily turn a modest $1,000 investment into a lot more money.
Image source: Getty Images.
Alibaba
Alibaba, China's largest e-commerce and cloud infrastructure company, still trades more than 50% below its all-time high from October 2020. Three significant challenges caused that decline.
NYSE: BABA
Key Data Points
First, China's antitrust regulators fined Alibaba a record amount in 2021. They barred its Chinese marketplaces (Taobao and Tmall) from locking merchants into exclusive deals, using aggressive loss-leading promotions, and expanding through unapproved investments. Those restrictions eroded its defenses against its competitors. Second, the pandemic curbed consumer spending and drove its enterprise customers to rein in their cloud spending. Lastly, the trade conflicts between the U.S. and China drove many U.S. investors away from Chinese equities.
Yet Alibaba isn't down for the count. It's expanding its overseas marketplaces (including Lazada in Southeast Asia, Trendyol in Turkey, Daraz in South Asia, and AliExpress for cross-border purchases), as well as its Cainiao logistics business, to offset slower e-commerce sales in China. It's also stabilizing Taobao and Tmall with AI-driven recommendations, upgraded merchant tools, and accelerated deliveries across its expanding logistics network. The AI market's rapid growth is also stirring up strong tailwinds for its cloud business, which hosts its Qwen large language model (LLM) for developing generative AI applications.
From fiscal 2025 (which ended last March) to fiscal 2028, analysts expect Alibaba's revenue and EPS to grow at CAGRs of 8% and 10%, respectively. Its high-growth days might be over, but it still looks like a bargain at 18 times next year's earnings.
Intuitive Machines
Intuitive Machines manufactures lunar landers and exploration vehicles. It's sent two of its Nova-C landers to the moon for NASA so far: IM-1 (Odysseus) in February 2024, and IM-2 (Athena) in March 2025. Odysseus marked NASA's first moon landing since 1972.
NASDAQ: LUNR
Key Data Points
Intuitive plans to launch its third lunar mission, IM-3, as the next step in that Commercial Lunar Payload Services (CLPS) contract with NASA later this year. It also holds additional lunar terrain vehicle (LTV) contracts, an exclusive near-space network services (NSNS) agreement, a lunar communications contract, and a lunar logistics solutions contract with NASA.
Over the long term, Intuitive plans to expand into a diversified "one-stop shop" for space transportation services. It recently acquired Lanteris Space Systems, a developer of satellite and space defense systems, to accelerate that transformation, increase its exposure to the defense sector, and gradually reduce its dependence on NASA's lunar missions.
From 2025 to 2027, analysts expect Inituitive Machines' revenue to rise nearly fivefold. They also expect it to turn profitable in 2026 and grow its net income more than fivefold in 2027. Those are explosive growth rates for a stock trading at 2 times this year's sales.
Intuitive's valuations are likely being compressed by three issues. First, both IM-1 and IM-2 landers tipped over during landing, limiting the data they returned to Earth. If IM-3 suffers the same fate, NASA might reconsider using its landers for future missions. Second, reduced federal spending could reduce NASA's contract awards. Lastly, it faces a growing number of competitors. But if it overcomes those challenges, its stock could head a lot higher.
