Alphabet’s SpaceX Bet Turns Into Another Billion Dollar Accounting Win

Why accountants should care

This shows how a private company’s value can change a public company’s earnings even when no cash moves.

That is exactly what just happened to Alphabet.

What actually happened

SpaceX completed a tender transaction that values the company at about $800 billion. Insider shares reportedly traded around $421 per share.

Alphabet invested in SpaceX back in 2015 with Fidelity in a roughly $1 billion round. That gave the group about a 10 percent combined stake. Alphabet still owns a minority, non controlling interest.

Alphabet did not sell anything. No cash came in. But the higher value still matters for accounting.

How this hits Alphabet’s financials

Alphabet treats its SpaceX stake as a non marketable equity security. In simple terms, it is a private investment with no public stock price.

Under U.S. accounting rules, Alphabet must update the value of this investment when new pricing information appears. Any change in value shows up as an unrealized gain or loss in earnings, usually in other income and expense.

So even though SpaceX is private and hard to sell, its higher value can still increase Alphabet’s net income.

Proof this already happened

In the first quarter of 2025, Alphabet reported about $8 billion of unrealized gains from non marketable equity securities.

Those gains boosted other income and helped drive a large increase in net income compared to the prior year. Alphabet did not name SpaceX, but several reports tied the gain to an earlier SpaceX valuation increase in late 2024.

This is a clear example of earnings going up without any cash coming in.

What this means for earnings quality

These gains increase net income, but they are not part of Alphabet’s core business and they do not generate cash.

Because of that, analysts usually remove these gains when judging performance in areas like advertising and cloud. Large valuation changes can make headline earnings look stronger or weaker than operations really are.

About IPO talk

Some reports link the latest SpaceX transaction to IPO planning. An IPO is not needed for Alphabet to record gains.

Private tender prices alone are enough to change the value on Alphabet’s books.

If SpaceX does go public one day, Alphabet’s stake would then be priced using public market prices instead of private estimates.

What to watch next

Look at Alphabet’s next earnings report.

Focus on the line for unrealized gains and losses on non marketable equity securities and the related footnotes. That is where any impact from the $800 billion valuation would show up.

Bottom line

Alphabet’s SpaceX investment shows how private company value changes can move GAAP earnings.

No sale. No cash. Real impact on net income.

For accountants, it is a good reminder to separate operating results from investment valuation changes when analyzing financial statements.