Alphabet poised for another paper gain as SpaceX valuation jumps

Alphabet Inc., the company that owns Google, is preparing to record another major gain on paper after SpaceX finished a stock sale that puts the private rocket company’s worth at roughly $800 billion.

SpaceX sold shares to insiders at $421 each, Bloomberg reported Friday. This price represents a big jump from previous sales and will likely increase the value of Google’s investment in Elon Musk’s space business.

Alphabet has owned part of SpaceX since at least 2015. Back then, Google teamed up with Fidelity Investments to put $1 billion into the company, getting about 10% ownership between them, Bloomberg previously reported.

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.

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