SpaceX Considers 2026 IPO with $1.5 Trillion Valuation
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 18 2026
0mins
Should l Buy GOOG?
Source: Yahoo Finance
- IPO Plans: SpaceX is considering going public in 2026 with a target valuation of $1.5 trillion, an unprecedented IPO size that could challenge public market response capabilities.
- Alphabet's Investment Return: Alphabet invested $900 million for a 7% stake in SpaceX in 2015, and if SpaceX goes public, that stake could be worth approximately $105 billion, significantly enhancing Alphabet's asset leverage.
- Market Potential: SpaceX's successful launches and its Starlink satellite internet business provide a strong recurring revenue stream, further increasing its market appeal and likely attracting more investor interest.
- AI Investment Consideration: Alphabet faces a strategic decision on whether to retain its SpaceX shares or sell them to fund AI infrastructure, with AI investments appearing more compelling in the short term, showcasing the company's strategic flexibility.
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Analyst Views on GOOG
Wall Street analysts forecast GOOG stock price to fall
15 Analyst Rating
14 Buy
1 Hold
0 Sell
Strong Buy
Current: 397.170
Low
255.00
Averages
336.08
High
400.00
Current: 397.170
Low
255.00
Averages
336.08
High
400.00
About GOOG
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.
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- Collaboration Talks: SpaceX and Google are in discussions about using rocket launches to place data centers in space, a concept that, despite technical challenges, could revolutionize AI computing infrastructure and attract significant investment.
- Market Reaction: Google's shares fell during midday trading on Tuesday, indicating cautious investor sentiment regarding the collaboration's prospects, as skepticism about the technical feasibility may impact Google's short-term stock performance.
- Technical Challenges: Engineers express skepticism about building solar-powered AI data centers in space, citing numerous technical hurdles that could delay implementation or increase costs, potentially affecting SpaceX's IPO plans.
- IPO Outlook: SpaceX is preparing for an initial public offering as early as Q2 2026, with an estimated valuation of approximately $1.75 trillion, positioning it to become one of the largest publicly traded companies, which could provide substantial funding for future space projects.
See More
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- Orbital Data Center Concept: Alphabet is in discussions with SpaceX to explore the development of orbital data centers, which, despite being in the early stages, could significantly enhance both companies' competitiveness in the AI sector if successful.
- Investment Return Potential: Alphabet's 6% stake in SpaceX could be worth approximately $100 billion if SpaceX goes public at a $2 trillion valuation, representing a substantial return on investment for Alphabet.
- Energy and Land Use: The proposed orbital data centers would be powered by solar energy, alleviating land use concerns associated with traditional data centers while addressing the growing demand for AI computing.
- Future Development Outlook: With data center demand projected to increase by 165% by 2030 and Alphabet's capital expenditures reaching $190 billion, the company is signaling a long-term strategic investment in AI infrastructure.
See More
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- Coupon Rates and Maturities: The offering includes bonds with maturities ranging from 1.965% (due 2029) to 4.599% (due 2066), all priced at 100% of principal, which is expected to provide the company with a stable funding source to support its capital expenditures.
- Underwriter Lineup: Merrill Lynch International, Mizuho Securities USA, and Morgan Stanley International are acting as joint bookrunners for the transaction, indicating strong market confidence in Alphabet's debt issuance and establishing a solid foundation for future financing activities.
- Capital Expenditure Plans: Alphabet has outlined capital expenditures of up to $190B this year, and this debt issuance will provide necessary funding to achieve its long-term strategic goals in technology and infrastructure.
See More
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- Investor Confidence: Billionaire hedge fund manager Bill Ackman revealed that Pershing Square has recently increased its stake in Microsoft, believing that the market underestimates the resilience of M365, which is expected to drive long-term growth for the company.
- Core Business Performance: Microsoft's two core franchises, M365 and Azure, generate approximately 70% of its profits, with M365 regarded as the dominant workplace productivity platform, used daily by over 450 million people, indicating its deep integration within enterprises.
- Market Opportunities: Ackman pointed out that the current market volatility and the rise of passive index investing have created rare dislocations in high-quality stocks, similar to his previous investments in Google, Amazon, and Meta, asserting that MSFT offers compelling long-term value at today's valuation.
- Valuation Analysis: Pershing Square began building its Microsoft position in February at roughly 21x forward earnings, which is close to the broader market multiple and below Microsoft's historical average, reflecting confidence in future growth.
See More
Surge in AI Investment, Decline in Buybacks
- AI Investment Surge: Alphabet plans to allocate $180 billion to $190 billion for AI capital expenditures in 2023, while Meta has raised its AI spending forecast to between $125 billion and $145 billion, highlighting both companies' commitment to AI technology and its potential market impact.
- Significant Sales Growth: The integration of generative AI and large language models into Google Cloud has led to a remarkable 63% increase in high-margin sales in Q1 2023, indicating that the application of AI technology is significantly enhancing company performance.
- Decline in Buybacks: Despite Alphabet and Meta repurchasing $15.1 billion and $12.8 billion of stock respectively in Q1 2025, both companies completely halted buybacks in Q1 2026, which could negatively impact the stock market, especially given that buybacks have been a strong market support.
- EPS Enhancement Potential: Over the past decade, Alphabet and Meta have repurchased nearly 13% and 12.7% of their outstanding shares, significantly boosting earnings per share (EPS); however, with increased AI capital expenditures, their future buyback capabilities may be constrained, affecting the attractiveness of their valuations to investors.
See More
Semiconductor Industry Fuels AI Boom
- AMD Market Share Growth: AMD launched its MI300X GPU designed for AI workloads in 2023, attracting customers like Oracle and Microsoft, which helped it capture market share from Nvidia, with expectations of 80% revenue growth in its data center business by 2027.
- Next-Gen AI Accelerators: AMD plans to launch the MI450 series AI accelerators by year-end, configured in Helios data center racks, boasting a 36-fold performance increase over previous GPUs, aimed at competing with Nvidia's new system and further solidifying its market position.
- Broadcom's Strong Performance: Broadcom's AI products generated $8.4 billion in revenue in Q1 2026, a 106% year-over-year increase, with guidance suggesting an acceleration to 143% growth in Q2, indicating the growing importance of AI hardware in its business.
- Investment Value Comparison: While AMD's P/E ratio stands at 97.5 compared to Broadcom's 56.9, making the latter more attractive for value investors, AMD's smaller market cap suggests greater long-term growth potential, appealing to growth-oriented investors willing to take on risk.
See More
