Let’s cut to the chase: Google’s (Alphabet’s) recent earnings report wasn’t driven by, you know, Google. It was seriously juiced by an $8 billion unrealized gain from its stake in SpaceX. Yes, that SpaceX. This isn’t pocket change, folks. This is a massive injection of profit courtesy of Elon Musk’s space ambitions.
Google’s been a believer in SpaceX since at least 2015, throwing down $1 billion alongside Fidelity, snagging roughly 10% of the company. Smart money, obviously. But the real kicker? SpaceX’s internal share sale in December 2024 pegged the company’s valuation at a jaw-dropping $350 billion.
Consequently, Alphabet’s net income soared to $34.5 billion, translating to $2.81 per share. Think about that for a moment. A private company, pushing the boundaries of space exploration, is significantly impacting the bottom line of one of the world’s largest tech giants.
Let’s unpack what this means, beyond the headline numbers:
SpaceX’s rapid valuation growth showcases the potent combination of innovation, government contracts (particularly with NASA), and a visionary (albeit sometimes controversial) leader. This demonstrates a clear shift in investment focus.
Unrealized gains, like the one Google experienced, are essentially paper profits. They depend on the continued valuation of the underlying asset. Market sentiment and future performance dictate if those gains become realized.
Investing in disruptive technologies, even those seemingly detached from core business operations, can yield substantial returns. Google’s long-term bet on SpaceX serves as a compelling case study.
The sky’s the limit, quite literally, for SpaceX, and Google is along for the ride. This also highlights a wider trend of private capital fueling space exploration, and reducing reliance on traditional governmental funding. And it’s a massive wake up call for anyone still betting solely on traditional tech!
