When looking for stocks to buy today, SpaceX might appear on the radar of investors. After all, the rocket giant’s crashed 50% since mid-June and will report its second quarter in early August. A rosy outlook might send it flying.
Even so, it’s still extremely overpriced as far as I’m concerned. Therefore, I think these two growth shares are worth considering ahead of SpaceX in August.
Internet of Things
The first stock’s Samsara (NYSE:IOT). Founded in 2015, the company is “bringing AI to the physical world“.
How’s it doing that? By connecting sensors and dash cams to AI-powered software that helps businesses track, monitor, and manage their real-world assets. That’s vans, garbage trucks, school buses, construction equipment, buildings, and even workers.
Once these are connected, Samsara’s platform allows customers to optimise routes, automate vehicle logs, improve driving behaviour, monitor safety hazards, detect potholes, stop food from spoiling, and much more.
The firm estimates that just 34% of vehicles, 13% of powered equipment, and basically 0% of unpowered equipment (trailers, containers, dumpsters, etc) are connected worldwide today. This points to a very large growth opportunity.
In Q1, revenue spiked 31% higher to $479m, with annual recurring revenue now above $2bn. The company also just reported its third consecutive quarter of GAAP profitability.
That said, the fact Samsara has only just turned profitable adds risk. Any delay in signing up more customers, while continuing to invest in the business, could see it dip back into the red.
Also, at 9 times forward sales, the stock isn’t conventionally cheap. But given the significant opportunity ahead, and the blue-chip customers it’s attracting (including Domino’s Pizza, Hertz, and Sainsbury’s), I think the stock’s worth a look while it’s down 45% from highs.
Note, Wall Street’s price target’s 40% higher.
Our customers are facing unprecedented demand and are constrained by worker capacity. We see a massive opportunity to transform physical industries with Operational AI and AI Agents — automating work, unlocking capacity, and driving greater productivity across the sectors that power the global economy.
Samsara
Private company specialist
Turning to the FTSE 250, I want to highlight Schiehallion Fund (LSE:MNTN). This is an investment trust that aims to find transformative, later-stage growth companies before they go public.
Admittedly, I’m going to sound like a bit of a hypocrite because SpaceX is in the fund. Not only that, but it makes up around 11% of assets! So near-term performance could suffer if SpaceX stock keeps nosediving.
On the other hand, I’m not worried about this because Schiehallion can sell 20% of its profitable stake straight after SpaceX’s second quarter earnings next week. I presume it will do so to manage risk, while keeping SpaceX as a long-term holding due to the massive growth opportunity ahead.
Elsewhere in the portfolio, there are exciting growth businesses like TikTok owner ByteDance, AI juggernaut Anthropic, payments giant Stripe, global digital bank Revolut, and self-driving software provider Wayve.
All of these are private companies, meaning investors can only get exposure to them through trusts like Schiehallion.
Finally, the FTSE 250 stock has dipped 12% from recent highs, offering what I think is a decent entry point to consider getting involved.
Should you invest £5,000 in Samsara right now?
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Ben McPoland owns shares in Samsara.
