Alphabet's Space Bet Could Skyrocket: Why the SpaceX Investment Matters for 2026

The Overlooked Goldmine in Alphabet’s Portfolio

While most investors focus on Alphabet’s dominance in search and its recent AI breakthroughs, few pay attention to a quiet but potentially transformative asset: its substantial stake in SpaceX. With SpaceX poised for an anticipated IPO in late 2025 or early 2026, Alphabet’s roughly 7% ownership could unlock serious value. What started as a $900 million investment back in 2015 when SpaceX was valued at around $12 billion now sits on a potential goldmine.

How the Investment Landscape Has Shifted

SpaceX recently hit an $800 billion valuation in secondary market transactions, and Elon Musk has signaled targets of $1.5 trillion for an IPO. At that valuation, Alphabet’s stake alone could be worth over $100 billion — a stunning return on a decade-old investment. But the real story isn’t just about the numbers; it’s about why SpaceX has become so valuable in the first place.

The company has transformed from a rocket manufacturer into a comprehensive space infrastructure provider. In 2024 alone, SpaceX has launched over 100 rockets, with more than 70 dedicated to deploying its Starlink satellite constellation. Starlink has evolved into a global high-speed internet service with over 8 million customers across 150 markets, even securing partnerships with roughly two dozen airlines. This diversification into telecom services has fundamentally changed investor perception of the business.

More Than Just Starlink

SpaceX’s revenue streams extend well beyond satellite internet. The company provides critical launch services for U.S. government contracts and commercial space ventures, creating a stable, recurring revenue model. Additionally, the company is exploring orbital data centers — facilities powered by solar energy with naturally free cooling from the vacuum of space. While this sounds futuristic, major tech players, including Alphabet itself through its Project Suncatcher initiative, are seriously investigating the concept.

Project Suncatcher represents a partnership between Alphabet and Planet Labs (in which Alphabet holds a 10% stake), with plans to launch prototype satellites in 2027. Alphabet is also positioning itself in adjacent space technologies through a stake in AST SpaceMobile, which develops technology enabling satellite networks to connect directly to standard smartphones.

Alphabet’s Broader Tech Ecosystem

Understanding why this SpaceX investment matters requires zooming out to see Alphabet’s complete technology stack. The company’s influence extends far beyond search — it powers over 90% of global search traffic through its combination of Chrome, Android, and distribution agreements with Apple. YouTube remains the world’s largest video platform, while Google Cloud has emerged as the company’s fastest-growing segment, driven by enterprise demand for AI infrastructure.

Alphabet has built competitive advantages through custom AI chips called Tensor Processing Units (TPUs) and its highly regarded Gemini large language model. These technologies are being embedded across Alphabet’s product suite to enhance functionality and user experience. Waymo, its autonomous taxi service, has scaled to over 450,000 weekly paid rides and is preparing international expansion into Tokyo and London. Meanwhile, quantum computing via its Willow chip represents another frontier where Alphabet is pushing boundaries.

The Valuation Question

Trading at approximately 27 times forward earnings based on 2026 analyst estimates, Alphabet’s stock reflects premium valuations. Yet this premium increasingly accounts for the company’s evolution from a search and advertising giant into a comprehensive AI and infrastructure powerhouse. The SpaceX IPO windfall simply adds another upside catalyst to an already compelling growth narrative.

The Investment Case

Alphabet has quietly assembled one of the most diversified and forward-looking asset portfolios in technology. While headlines focus on competition in AI and search, Alphabet’s space investments — particularly its early SpaceX position — represent substantial optionality that could reach remarkable valuations in the coming years. For investors tracking the company, 2026 could mark a significant moment when these hidden assets finally get recognized by the broader market.