Google Discloses $94.1 Billion in SpaceX Stock, Marking 6% Stake
Alphabet has disclosed a $94.1 billion investment in SpaceX that significantly increased its quarterly profits, though the shares remain restricted from sale.
Google Discloses $94.1 Billion in SpaceX Stock, Marking 6% Stake
Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) has revealed a significant investment in rocket maker SpaceX (NASDAQ: SPCX) worth approximately $94 billion as of June 30, according to a quarterly filing with the Securities and Exchange Commission. The holding represents an effective stake of about 4.9% of the company, having declined from roughly 6% prior to recent dilution.
The investment traces back to January 2015, when Google and investment firm Fidelity contributed $1 billion for a combined stake of just under 10%. Since then, SpaceX has reached a market value of $1.5 trillion, which is approximately 150 times the company's valuation during that funding round.
Restricted Gains and Financial Impact
Despite the massive valuation, Alphabet cannot currently liquidate the position. The filing specifies that the entirety of the stake is restricted from sale. Marketable equity securities include $80 billion in short-term restricted shares — typical of lockup periods following an initial public offering — and $14.1 billion that remains restricted through the third quarter of 2027.
The valuation of these shares heavily influenced Alphabet's reported second-quarter profits. Net income surged 298% year over year to $112.1 billion, with earnings per share rising 294% to $9.11. This growth was driven by a $99.0 billion gain on equity securities, which primarily reflected unrealized gains from SpaceX and the artificial intelligence developer Anthropic.
However, these "unrealized" gains are paper values rather than cash. The distinction became a point of focus for investors, as Alphabet simultaneously raised its capital spending guidance for 2026 to between $195 billion and $205 billion, up from a previous range of $180 billion to $190 billion set in April. The company also sold new stock in June to raise $49.6 billion.
Alphabet's free cash flow for the quarter swung to negative $5.9 billion, compared to a positive $10.1 billion in the first quarter. Following the report, shares of Alphabet fell about 7% on Thursday afternoon.
Implications for SpaceX
The disclosure provides a mixed signal for SpaceX shareholders. On one hand, Alphabet's decade-long hold is viewed as a vote of confidence. On the other, the potential for a massive influx of shares on the open market looms. SpaceX stock has struggled since its June debut, where it went public at $135, peaked at $225.64, and has since traded at about $116, a drop of nearly 49% from its high.
The restrictions on Alphabet's shares are scheduled to begin easing after SpaceX delivers its first earnings report on August 4. While Alphabet has not announced plans to sell, the company faces nearly $200 billion in planned spending.
Broader Market Context
The revelation comes as Alphabet and Tesla, both members of the "Magnificent Seven," have concerned investors by burning through cash to fund AI infrastructure. For Alphabet, the SpaceX stake accounts for roughly 2.4% of its $3.9 trillion market capitalization.
Analysts suggest the investment case for Alphabet remains tied to its operating business, where revenue grew 24% year over year last quarter, and the eventual payoff of its AI spending, rather than the SpaceX windfall.
