Alphabet Inc. (GOOGL) (GOOG) never built a rocket. But it turns out, buying a stake in someone else's rocket company was the smarter move.

Back in 2015, when Google's parent company was still making big venture bets, it wrote a $900 million check to Elon Musk's SpaceX at a $12 billion valuation. At the time, it looked like just another moonshot investment—literally. Eleven years later, that bet might be the best trade Alphabet ever made, and it didn't require launching a single satellite.

How a Side Bet Became a Jackpot

That quiet investment has exploded in value after Musk proposed merging SpaceX with xAI, creating a combined company valued at around $1.25 trillion. Even after accounting for dilution over the years, analysts estimate Alphabet still owns roughly 7% of the business. Run the numbers and you're looking at somewhere between $87 billion and $90 billion today, with potential upside toward $100 billion if an IPO materializes in mid-2026.

For years, this massive stake stayed hidden because SpaceX remained private. The curtain started to lift in early 2025 when Alphabet reported an $8 billion unrealized gain in a single quarter as SpaceX's valuation jumped. The proposed merger makes that paper profit look even more impressive—we're talking about a single investment worth more than the entire market capitalizations of Uber Technologies Inc. (UBER) or Airbnb Inc. (ABNB).

The Sleeper Asset Inside GOOGL

When investors buy Alphabet stock, they're usually thinking about search dominance, advertising revenue, and AI capabilities. What most don't realize is they're also getting a huge piece of the world's leading space-and-AI company. If SpaceX does go public, this stake could transform into one of the most powerful—and least expected—catalysts for GOOGL shares.

The Lesson Here

Here's the twist: Alphabet's best return on investment didn't come from Pixel phones, Google Fiber, or any of its ambitious in-house projects. It came from a venture check that probably seemed like a side bet at the time. For investors, the takeaway is straightforward—Alphabet's balance sheet holds more than just ad revenue and algorithms. It contains a near-$100 billion stake in SpaceX that could soon convert from paper gains into very real money.