What’s the key common denominator between SpaceX and Tesla (TSLA 1.98%)? That’s an easy question. The answer, of course, is Elon Musk. The world’s richest person founded SpaceX and runs Tesla.

Musk will soon pad his enormous wealth even more. SpaceX plans to go public in the next few months at a valuation reported to be near $2 trillion. Musk won’t be the only early investor to make a lot of money from the space technology company’s IPO. One “Magnificent Seven” stock will also be a big winner. But it’s not Tesla.

A smart bet

Although Musk has a personal stake in SpaceX, Tesla hasn’t invested in the company. However, Google parent Alphabet (GOOG 1.19%) (GOOGL 1.26%) made a smart early bet on SpaceX that’s about to pay off big-time.

In 2015, Alphabet (then named Google) invested around $900 million in SpaceX, alongside Fidelity (FNF +1.45%). At the time, SpaceX was valued at roughly $12 billion, giving Google a 7.5% stake in the space tech company. Over the last 11 years, SpaceX has issued more shares, diluting Google’s position somewhat.

However, a recent regulatory filing in Alaska revealed that Google still owned 6.11% of SpaceX at the end of 2025. Assuming the company hasn’t sold any of its shares since then and SpaceX’s IPO valuation is $2 trillion, its stake will be worth roughly $122.2 billion.

Let’s put Google’s bet on SpaceX into perspective. An initial investment of $900 million, growing to $122.2 billion, yields a nearly 136x return. This increase translates to a compound annual growth rate of roughly 56.3%. Google’s investment in SpaceX appears to be its best deal since the acquisition of YouTube in 2006. That’s saying a lot.

Alphabet

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Ancillary benefits

Alphabet isn’t just scoring from what’s on track to be the biggest IPO stock ever based on market cap. The company will also receive multiple ancillary benefits from SpaceX securing additional capital to fund its expansion plans.

For example, SpaceX’s Starlink unit is a Google Cloud customer. SpaceX inked a deal with Google Cloud in 2021 that allows it to install ground stations at Google data centers. These ground stations connect to Starlink satellites.

Starlink provides satellite internet service to many areas around the world that would otherwise have no internet access. More internet access means more people will use applications hosted on Google Cloud.

Even better, the more people globally who have internet access, the more users of Google Search and YouTube there are. Alphabet’s Android ecosystem could also benefit as more mobile devices are used in emerging markets — especially there.

A financial and strategic win for Alphabet

Alphabet wins in two ways from the SpaceX IPO. It will score a huge financial victory as the space stock‘s soaring valuation gives Alphabet a one-time earnings windfall. The company also wins strategically, as Starlink’s growth (fueled by additional capital raised in the IPO) expands internet usage.

Is Alphabet a good “backdoor” way of investing in SpaceX before the IPO? I think so. However, I also believe that Alphabet is a smart pick even without its bet on SpaceX.

Google Cloud is the fastest-growing of the top three cloud service providers. Google Search and YouTube continue to dominate their respective markets. Google Gemini consistently ranks among the most powerful AI models. Alphabet is poised to be one of the top players in the smart glasses market. The company’s Waymo unit is the leader in autonomous ride-hailing.

Some might quibble about Alphabet’s $4.1 trillion market cap. However, its valuation is easier to justify than SpaceX’s.

I suspect we’ll soon see arguments that SpaceX should replace Tesla in the Magnificent Seven. Alphabet, though, will remain as magnificent as ever.