With Alphabet (GOOGL) and Elon Musk's SpaceX reportedly in talks about placing data centers in space, it appears that Google may indeed be serious about launching space-based systems to meet the needs of artificial intelligence (AI). That opportunity, along with several more promising initiatives that the tech giant is pursuing, makes GOOGL stock very attractive for long-term growth investors.
Here's what investors should know.
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About Alphabet Stock
Alphabet has a suite of very popular and valuable digital assets, including Google Search, YouTube, the Android ecosystem, and Google Cloud, among others. However, the firm currently generates the vast majority of its revenue from advertising.
Alphabet has a massive market capitalization of $4.8 trillion. Currently, GOOGL stock is changing hands at a trailing price-to-earnings (P/E) ratio of 30.7 times.
In the first quarter of 2026, Alphabet's consolidated revenue advanced 22% year-over-year (YOY) to $109.9 billion. Meanwhile, consolidated operating income climbed 30% YOY to $39.7 billion, making for an operating margin of 36%.
www.barchart.com Space-Based Data Centers Could Become a Big Business for Alphabet
While seemingly far off, well-respected consulting firm McKinsey recently wrote that space-based data centers could theoretically "offer both structural advantages, such as unconstrained energy scaling and higher solar efficiency, but also the potential for cost competitiveness with terrestrial systems.” The firm also quoted Starloud CEO Philip Johnston as saying that a lack of bureaucracy in space will make it easier to provide power for data centers there than on Earth.
“The biggest constraint for data centers on Earth today is energy, specifically the ability to build new energy infrastructure fast enough. In some regions, even relatively straightforward large-scale solar installations can face multiyear permitting timelines and, often, local obstacles. In space, those constraints can disappear, and we face far fewer bottlenecks to scale energy production, particularly in certain orbital,” said Johnston.
That said, as McKinsey also noted, the idea of space-based data centers may not prove practical in the end.
Still, Alphabet is taking the time to discuss the matter with SpaceX and reportedly has plans to launch two prototype satellites by early 2027. It's unlikely that the tech giant would spend meaningful time and money on these efforts unless it thought there was a good chance of them bearing fruit. With demand for data centers expected to soar in the coming years, space-based systems could prove to be a lucrative venture for the company.
Alphabet Has Other Businesses With Huge Potential
Apart from these efforts, Alphabet's Waymo robotaxi unit is also expanding, now offering rides in cities like San Francisco, Los Angeles, Miami, Dallas, and Atlanta, among others. Further, the company is looking to add many more cities to its list relatively soon, including London and Tokyo. Given this list and Waymo's success so far, there's a good chance that robotaxis will be a positive needle mover for GOOGL stock within a few years.
Meanwhile, Google Gemini's share of the AI platform market is increasing. The firm's AI chip business looks poised to explode higher, too, as Google has announced major deals to provide Tensor Processing Units (TPUs) to both Meta Platforms (META) and Anthropic.
The Bottom Line on GOOGL Stock
Given Alphabet's strong growth and its many “shots on goal,” shares appear quite cheap in context. In a previous article on GOOGL stock, I suggested that short-term investors sell shares amid concerns about ad spending. But with oil prices high-yet-steady in recent weeks and the U.S. economy appearing to be relatively resilient to the crisis, the short-term outlook looks less concerning at this point.
On the date of publication, Larry Ramer did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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