Google SpaceX AI Capacity Deal

"Gemini models are seeing strong demand from developers and businesses, while the Gemini app has surpassed 950 million monthly users. Google DeepMind's AI research continues to deliver breakthrough innovations, citing the recent advances in Gemini Robotics."

"GOOGL projects mid-to-high teens CAGR through 2031, supported by strong operating cash flow and aggressive AI infrastructure investments."

"While these initiatives could create sizable long-term opportunities, they are also keeping expenses elevated. Morgan Stanley analyst Adam Jonas maintains one of the Street's most bullish views with a $300 price target, citing SpaceX's vertically integrated business model and long-term growth opportunities."

"Google's relationship with SpaceX now spans three distinct layers: a $94.1 billion equity stake built over a decade, a $920 million-a-month contract for terrestrial AI computing capacity running through 2029 and early-stage talks over orbital data centers that could extend the partnership into space itself."

"During an investor call, Alphabet executives said that there were plans to significantly increase spending on AI next year. While the Sundar Pichai-led company didn't mention exactly how much it will spend next year, this year it plans to spend $185 billion, which is more than double what it spent in 2025."

"This year, that number is expected to be between $180 billion and $190 billion, roughly six times 2022 levels and double what the company spent last year. That is the financial muscle behind Alphabet's hardware ambitions."

"BNP Paribas analyst Nick Jones said this reinforces Google’s commitment to maintaining AI leadership despite capacity constraints."

"Still, he viewed the move as strategically prudent given Google Cloud’s backlog growth, rising AI adoption, and long-term revenue opportunities across Search, Cloud, and AI-driven products."