Alphabet’s SpaceX Bet Wiped 55 Cents Off Its Earnings
A single unlisted holding quietly erased more than half a dollar from Alphabet's quarterly earnings, and the CFO had to name it herself because the filing never did.
Alphabet (NASDAQ:GOOG | GOOG Price Prediction, NASDAQ:GOOGL) reported third-quarter earnings after the market closed on October 28, 2026. Alphabet’s diluted EPS fell to $2.12 from $2.87 a year earlier, down 26%. The stock closed at $324.89 and traded at $292.50 after hours around 7:59 p.m. ET, down 9.97%.
Alphabet’s release said an $8.7 billion loss on equity securities cut diluted EPS by $0.55, but did not name the holding. CFO Anat Ashkenazi named it. She disclosed the holding on the call: “Other income and expenses was negative $8.2 billion, due primarily to unrealized loss from our investment in SpaceX from a decline in its stock price in the third quarter.”
Alphabet’s operating income rose 30% to $40.576 billion, while a paper loss, mostly from SpaceX (NASDAQ:SPCX), cut net income 24% to $26.468 billion.
What Alphabet Filed Versus What It Said on the Call
Alphabet reported a net loss on equity securities of $8.664 billion. Alphabet’s other income (expense), net, swung to negative $8.221 billion from a $12.759 billion gain a year earlier, and the filing never mentions SpaceX.
The SpaceX link comes from the call, and Ashkenazi said “primarily,” so SpaceX drove most of Alphabet’s $0.55. Alphabet has disclosed neither its ownership percentage nor share count, and the third-quarter 10-Q was not on EDGAR as of early October 29.
A smaller tax bill reduced the impact: Alphabet said the loss cut its tax provision by $1.9 billion, holding the net income reduction to $6.7 billion.
How SpaceX’s Slide Landed in Alphabet’s Earnings
Alphabet marks listed holdings to market each quarter, so a lower share price flows into reported profit even when nothing is sold. The loss Alphabet booked reflects SpaceX sliding about 11.7%, from $170.86 at the end of the second quarter to $150.86 at the end of the third. That slide followed a sharp post-IPO run: shares opened at $150.00 on June 12, peaked at $225.64 intraday and set a record close of $211.39 on June 16.
Alphabet also can’t easily sell. Its second-quarter 10-Q showed $80.0 billion of SpaceX shares under short-term sale restrictions and another $14.1 billion restricted through Q3 2027, which keeps it from locking in gains or cutting losses.
What Alphabet’s Marks Mean for SpaceX Holders
SpaceX closed at $145.23 on October 28, down 2.25% in the session and about 35.6% below its 52-week high. That close stands about 3.7% below the September 30 level, and the stock traded at $143.63 after hours.
If SpaceX ends the fourth quarter below $150.86, Alphabet would book another unrealized loss, while a finish above it would produce a gain, and the restrictions mean Alphabet won’t be forced to sell now, although the smaller block remains restricted until Q3 2027.
Why SpaceX Explains Only Part of the Miss
Excluding the $0.55, Alphabet earned about $2.67 per share, which still falls about $0.34 short of consensus. The paper loss explains much of the miss, but the rest has nothing to do with the SpaceX mark.
The year-over-year decline partly reflects a tough comparison, because Alphabet’s Q3 2025 included a $10.734 billion equity gain. Capital spending of $51.355 billion also drove free cash flow to negative $9.065 billion.
Over nine months, the same accounting has helped Alphabet. Its net income was $201.239 billion versus $97.715 billion in 2025, and diluted EPS was $16.33 versus $7.99. That gain was lifted by $97.983 billion of other income in the quarter SpaceX listed, although the filing doesn’t break out how much of it came from SpaceX.
What Investors Should Watch After Alphabet’s SpaceX Hit
The SpaceX mark is unrealized and noncash, and it would reverse if SpaceX’s share price recovers. The underlying business kept growing, as Google Cloud revenue rose 103% to $30.709 billion and cloud operating income climbed to $11.121 billion from $3.594 billion, yet the stock trades at a P/E of about 14.
The larger risks are the $0.34 shortfall and the cash burn from AI spending, so check the third-quarter 10-Q for the updated SpaceX stake, and keep an eye on whether GOOGL holds its $292.50 after-hours level. A sustained close below that price would mean the market is seeing the miss as more than a noncash accounting loss.
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Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
