Key Stats for Alphabet Stock
- Price change for Alphabet stock in past 6 months: 17%
- $GOOGL Share Price as of Jun. 5: $369
- 52-Week High: $409
- $GOOGL Stock Price Target: $431
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What Happened?
Alphabet (GOOGL) stock was in the headlines on Friday after Google signed one of the biggest AI computing deals in the industry’s history.
According to a regulatory filing, Google will pay SpaceX $920 million a month for access to approximately 110,000 Nvidia GPUs housed in SpaceX’s data centers, with the agreement running from October 2026 through June 2029.
- A Google Cloud spokesperson said the deal was made to secure “bridge capacity” for surging demand for its Gemini Enterprise platform, which has grown even faster than expected.
- That lines up with Q1 results. Google Cloud revenue surged 63% to $20 billion, and the backlog nearly doubled quarter over quarter to $460 billion.
- Gemini Enterprise paid monthly active users grew 40% in a single quarter.
The timing of the deal is no coincidence.
It was disclosed in SpaceX’s IPO filing days before the company’s planned offering at a valuation of over $1.75 trillion — giving investors a clear signal that SpaceX’s xAI data centers in Memphis can generate serious commercial revenue, even as the Grok AI model struggles to gain traction against rivals.
Alphabet stock also stands to benefit from its early SpaceX investment. Google invested in SpaceX back in 2015 when the company was worth $12 billion — and SpaceX is now targeting an IPO above $1.75 trillion, representing a historic return on that early bet.
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What the Market Is Telling Us About Alphabet Stock
The SpaceX deal tells you something simple and important: demand for AI compute is so extreme that even the world’s largest tech companies can’t build data centers fast enough to keep up.
Google is spending $180 billion to $190 billion on capital expenditures in 2026 alone, and management has already said 2027 will be significantly higher.
To fund the buildout, Alphabet announced an $85 billion stock sale this week, including a $10 billion investment by Berkshire Hathaway. That’s a lot of dilution, but the returns are starting to justify it.
Cloud operating margin expanded from 17.8% a year ago to 32.9% in Q1, and AI solutions revenue grew nearly 800% year-over-year.
Alphabet stock has climbed about 17% this year. It sits roughly 10% below its all-time high.
With Google Cloud compounding faster than any other business unit and new AI compute deals still landing, the stock looks well supported heading into the back half of the year.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
