Key Points:
- SpaceX valuation surges to $800B, boosting Alphabet’s decade‑old investment.
- Alphabet earnings may see unrealised gains from the sharp valuation jump.
- Analysts raise Alphabet outlook on AI growth and Gemini adoption.
Alphabet Inc. is set to record another large paper gain after SpaceX completed a new internal stock sale that sharply increased the private company’s valuation. The transaction values SpaceX at roughly $800 billion, marking one of the highest valuations ever reached by a privately held firm.
According to reports, SpaceX sold shares to insiders at $421 each. The price represents a significant rise from earlier internal transactions and directly affects the value of Alphabet’s long-standing investment in the rocket and satellite company founded by Elon Musk.
Alphabet has held a stake in SpaceX since at least 2015. That year, Google partnered with Fidelity Investments to invest $1 billion in the company. The deal gave the two investors a combined ownership of about 10 per cent. Since then, SpaceX’s repeated valuation increases have quietly boosted the value of Alphabet’s balance sheet.
Rising SpaceX Valuation Lifts Alphabet Outlook
While Alphabet Inc. does not break out individual private holdings in its financial statements, changes in SpaceX’s value have influenced its earnings before. These changes typically appear under unrealised gains tied to non-marketable equity securities.
A similar situation unfolded in 2024. Alphabet reported an $8 billion gain in the first quarter that was linked to a private company investment. Market observers widely believed the gain was tied to SpaceX, following a late 2023 share sale that valued the company at about $350 billion. That accounting gain helped Alphabet exceed Wall Street profit expectations for the quarter.
The latest SpaceX transaction implies a much larger valuation jump than the one seen last year. As a result, investors and analysts are watching Alphabet’s upcoming quarterly report closely. Any adjustment tied to SpaceX could again provide a meaningful lift to reported earnings, even though it would remain unrealised on paper.
For business leaders, the situation highlights how minority stakes in high-growth private firms can materially affect public company results. It also underscores the long term impact of strategic investments made years before those companies reach peak valuations.
Investor Focus Shifts to Accounting Impact
Because SpaceX remains private, Alphabet Inc. cannot easily sell its shares or lock in profits. Still, accounting rules require companies to reflect changes in the fair value of certain private investments when there is a clear market signal, such as a share sale. This makes Alphabet’s earnings more sensitive to major valuation moves at SpaceX.
Market participants are now assessing how large the next unrealised gain could be. The increase from a $350 billion valuation to around $800 billion suggests a substantial jump in value for existing shareholders. Even a partial adjustment could influence quarterly profit figures.
For entrepreneurs, this serves as a reminder that patient capital and early entry into transformational companies can generate outsized returns over time. Alphabet’s investment has been held for a decade, during which SpaceX expanded from launch services into satellite internet and advanced space systems.
Analysts Remain Positive on Alphabet Growth
Alongside the SpaceX-driven optimism, analysts continue to raise expectations for Alphabet’s core business. TD Cowen recently lifted its price target on the stock to $350, reflecting confidence in the company’s artificial intelligence progress.
The firm maintained a buy rating even after Alphabet shares climbed 65 per cent this year. The new target suggests further upside from recent levels. Analysts pointed to growth in Google Search and increasing adoption of the Gemini AI platform as key drivers.
Forecasts for Google Search growth were revised upward, with expectations that AI-powered features will boost user engagement. Projections for Gemini usage were also increased, with analysts estimating hundreds of millions of users by the end of 2025 and much higher adoption later in the decade.
Together, the potential SpaceX accounting gain and continued AI-driven growth reinforce Alphabet Inc.’s position as a company that blends mature cash-generating businesses with long term innovation bets. For business owners and founders, it offers a clear example of how diversified investments and sustained innovation can strengthen leadership at scale.
