Looking For a Way to Profit from the SpaceX IPO? This Top AI Stock Owns a $100 Billion Stake in the Elon Musk-led Rocket and Satellite Leader.
Key Points
SpaceX stock is not yet publicly traded.
Yet an artificial intelligence (AI) giant owns a sizable portion of the space explorer's shares -- and you could invest in its stock today.
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SpaceX is widely expected to be the largest initial public offering (IPO) of all time when it makes its debut on the stock market later this year.
Elon Musk's rocket and satellite technology trailblazer is reportedly seeking to raise as much as $75 billion at a staggering $2 trillion valuation. That would make it more valuable than all but five companies -- Nvidia, Alphabet, Apple, Microsoft, and Amazon -- in the S&P 500.
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SpaceX is expected to use its IPO proceeds to expand Starlink, its popular low-earth orbit satellite network and high-speed internet service. The space exploration company also plans to use the cash to fund its rocket-development efforts and AI-focused initiatives.
SpaceX's public market debut could come as soon as June.
Image source: Getty Images.
Google was an early SpaceX backer
If you're looking for a way to cash in on what's likely to be the blockbuster IPO of the year, consider investing in Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG). A new disclosure filed this past week showed that Alphabet's Google owned a 6.11% stake in SpaceX at the end of last year.
Google made its initial investment in SpaceX back in 2015 when the aerospace manufacturer and space transportation start-up was valued at $10 billion. Yet the search king's equity stake may have been diluted when SpaceX merged with Musk's artificial intelligence (AI) start-up xAI in February. Google's ownership position likely now stands at about 5%, according to Bloomberg.
At that percentage, Google's stake would be worth a whopping $100 billion if SpaceX can achieve its targeted $2 trillion valuation following its upcoming IPO.
Yet Google's SpaceX holdings aren't the only reason to consider buying shares. Here are more reasons why Alphabet's stock is a smart investment today.
Google remains a cash cow
Despite the emergence of AI-powered chatbots from the likes of OpenAI and Anthropic, Google continues to maintain its dominant position in the global search market. YouTube likewise remains the leading online video platform. When combined with the company's other advertising, subscription, and device sales, Google generated more than $40 billion in operating income in the fourth quarter alone.
Google's cloud business is booming
Cloud computing is an even faster-growing division for Alphabet. Google Cloud's revenue surged 48% year over year to $17.7 billion in the fourth quarter, driven by soaring demand for AI infrastructure. Better still, Google Cloud is becoming more profitable, with operating income soaring 154% to $5.3 billion.
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Joe Tenebruso has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Microsoft, and Nvidia and is short shares of Apple. The Motley Fool has a disclosure policy.
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