Alphabet's SpaceX Investment Could Yield $105 Billion
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
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Source: Fool
- Investment Return Potential: Alphabet's $900 million investment for a 7% stake in SpaceX in 2015 could yield approximately $105 billion if SpaceX achieves a $1.5 trillion valuation at its anticipated 2026 IPO, significantly enhancing Alphabet's investment portfolio value.
- Market Reaction Test: The unprecedented size of SpaceX's IPO could have a substantial impact on market reactions, and if profitable, SpaceX may be included in the S&P 500, further elevating Alphabet's market position.
- AI Investment Strategy: Alphabet may opt to sell its SpaceX shares post-IPO to fund its generative AI infrastructure, which is crucial given the high costs of building data centers, thereby strengthening its competitive edge in AI.
- Diversified Business Portfolio: Beyond SpaceX, Alphabet's leadership in generative AI, cloud computing, and self-driving technology illustrates the success of its investment strategy, with SpaceX being a key component of its diversified investment portfolio that reinforces its market leadership.
Analyst Views on GOOGL
Wall Street analysts forecast GOOGL stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for GOOGL is 312.00 USD with a low forecast of 236.00 USD and a high forecast of 350.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
38 Analyst Rating
31 Buy
7 Hold
0 Sell
Strong Buy
Current: 332.780
Low
236.00
Averages
312.00
High
350.00
Current: 332.780
Low
236.00
Averages
312.00
High
350.00
About GOOGL
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
