Alphabet’s Paper Gains Soar as SpaceX Valuation Skyrockets

Alphabet's investment portfolio just got another boost from the stars—literally.

The SpaceX Effect

Forget moonshots—this is about balance sheets. Alphabet's strategic stake in Elon Musk's SpaceX is paying off big time as the aerospace giant's valuation climbs. It's the kind of paper gain that makes Wall Street analysts nod approvingly, even if the cash hasn't actually landed in the bank yet.

Portfolio Rockets

When one of your 'other bets' involves funding rockets, the financial trajectory tends to look good. The rising valuation injects pure, unadulterated optimism into Alphabet's earnings reports, providing a shiny narrative alongside its core ad business. It’s a classic tech play: diversify with visionary companies and let the market's imagination do the heavy lifting on your valuation.

The Paper Trail

Let's be real—these are unrealized gains. They look fantastic in a presentation deck and can buoy investor sentiment, but they're about as liquid as concrete until an exit event. It’s the financial equivalent of having a priceless painting on your wall; it makes you feel wealthy, but you can't spend it on groceries. A gentle reminder that in high finance, sometimes the most impressive numbers are the ones you can't actually touch.

Another quarter, another paper win for the tech conglomerate. The real test comes when they decide to cash in their chips—or just keep building the castle in the sky.

Similar gain boosted Alphabets earnings in 2024

Something similar happened last year. In April, Alphabet reported an $8 billion gain linked to its investment in an unnamed private company, widely believed to be SpaceX, after a stock sale late last year valued the rocket Maker at around $350 billion. That gain helped Alphabet’s profits for the first three months of the year beat what Wall Street analysts predicted.

Alphabet does not list specific private investments in its official reports. However, changes in SpaceX’s value have shown up before as “unrealized gains on non-marketable equity securities” in the company’s earnings statements.

Since SpaceX’s newest sale suggests a much bigger valuation, people who follow Alphabet’s stock will be looking at the company’s next quarterly report for signs of another accounting bump.

Analysts raise price targets on AI progress

Meanwhile, TD Cowen raised its price target for Alphabet to $350. Analyst John Blackledge said the new figure reflects what he sees in the company’s artificial intelligence work as reported by Cryptopolitan.

John maintained his buy recommendation on Alphabet even though the stock already went up 65% this year. He wrote that his new target means the stock could climb another 12% from Thursday’s closing price. He pointed to Google Search and growing use of Gemini as key reasons.

John increased his target after Google added AI overviews to Search. He now thinks Google Search will grow at 10.2% per year for the next five years, up from his earlier guess of 9.6%.

He linked the increase to more activity in Search as users turn on AI Mode and use AI overviews when searching. He also raised his prediction for Gemini users by the end of 2025 to 850 million, up from 600 million. He said Gemini could hit three billion users each month by 2030.

Get $50 free to trade crypto when you sign up to Bybit now