Key Points
Amazon's stake in Anthropic creates a powerful double benefit: huge equity gains plus a long-term AWS/Trainium spending commitment.
Alphabet's SpaceX stake has become a highly valuable liquid asset, but the company's IPO added volatility and temporarily reduced Alphabet's financial flexibility.
Amazon's (NASDAQ: AMZN) investment in Anthropic has become something more than a side bet for the tech giant. In recent quarters, the company has reported over $50 billion in non-operating pretax income primarily tied to revaluations of its Anthropic stake, a contribution big enough to shift its headline profit numbers on its own. Amazon has put about $13 billion into Anthropic so far, and its filings show that stake to have a carrying value near $190 billion as Anthropic's private-market valuation has climbed toward the trillion-dollar mark.
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That financial stake sits atop a deep commercial partnership. Anthropic has agreed to spend more than $100 billion over 10 years on AWS technologies and Amazon's custom Trainium chips, locking in up to 5 gigawatts of compute capacity to train and run Claude models on Amazon's cloud. The result is that Amazon benefits twice -- once from the mark-to-market gains on its equity and again from Anthropic's long-term commitment to spend heavily with AWS.
Alphabet and SpaceX
Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) exposure to Space Exploration Technologies (NASDAQ: SPCX) looks different now that the rocket company is public. SpaceX completed the largest IPO in history on June 12, pricing shares at $135 and entering the market with a valuation near $1.8 trillion. The company has more recently traded in the $1.7 trillion to $1.9 trillion range as investors have digested its first earnings report, which was released earlier this month. Alphabet's original $900 million investment from 2015 has turned into a mid-single-digit-percentage stake worth roughly $80 billion to $90 billion at recent prices, a gain of more than 90 times that initial outlay.
The big change for investors is transparency. SpaceX is no longer a black box on Alphabet's balance sheet. The stake is now a liquid asset with a clear market value that fluctuates daily. Alphabet can choose to keep the shares as a long-term bet on commercial space and space-based AI compute, or sell part or all of the stake to fund new investments in AI.
The SpaceX IPO could be good or bad for Alphabet, depending on your perspective. The market's shifting view of SpaceX can inject more volatility into Alphabet's reported earnings, and may make it harder for investors to separate Alphabet's core operating performance from the market noise around the rocket company's stock. On top of that, much of Alphabet's multibillion-dollar position is still locked up, as the phased release of insiders' shares will continue over the next year or so.
So Alphabet management has limited flexibility to realize those gains or reduce its exposure even if SpaceX's share price slides.
Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Amazon. The Motley Fool has a disclosure policy.