We’re only days away from the biggest initial public offering (IPO) in stock market history. SpaceX is preparing to launch at a valuation of roughly $1.8 trillion. And this already interesting IPO story just became even more intriguing.
SpaceX announced on June 5, 2026, that it had entered into a three-year cloud service agreement with Google LLC, an operating unit of Alphabet (GOOG 1.20%) (GOOGL 1.26%). What made the contract so noteworthy is that Google will pay SpaceX a whopping $920 million per month. Could the Google deal further turbocharge SpaceX’s imminent IPO? Quite possibly.
Image source: Getty Images.
A Google-driven game-changer?
Many investors love SpaceX’s Starlink satellite internet service business. Last year, Starlink and other parts of the company’s connectivity segment generated $11.4 billion of SpaceX’s total revenue of $18.7 billion. Starlink is also the only part of the company’s operations currently generating positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
On the other hand, investors haven’t been so thrilled about SpaceX’s xAI unit. It’s losing money. The company’s capital expenditures related to the AI business totaled $12.7 billion in 2025. Those expenses continue to soar.
However, SpaceX’s deal with Google could help change the consensus perspective about xAI. Instead of a huge drag on SpaceX’s investing proposition, it could now be seen as a promising growth area for the company.
That’s especially the case considering that SpaceX also recently announced a cloud services agreement with Anthropic, which developed the popular Claude AI model and also has a highly anticipated IPO on the way. The Anthropic deal is for $1.25 billion per month — even bigger than the Google contract.
SpaceX is now on track to rake in significantly more annual revenue from Google and Anthropic that it did with all of its businesses in 2025. This explosive growth, in addition to Starlink’s exceptional momentum and a burgeoning launch services unit, could — and likely will — make the IPO stock even more attractive to growth-oriented investors.
Coming back to earth
But does the Google agreement (along with the Anthropic contract) really make SpaceX a compelling stock to buy? Not really.
Sure, these high-profile, high-dollar cloud service agreements change the narrative about xAI. They could even mute some of the criticism of SpaceX’s claim of a total addressable market of $28.5 trillion, with $22.7 trillion of that amount stemming from enterprise applications (which means xAI instead of Starlink or launch services).
However, the Google and Anthropic deals still don’t justify SpaceX’s planned astronomical market cap of $1.8 trillion. Morningstar (MORN 2.29%) pegs a more realistic valuation for the space technology company at $780 billion. In particular, Morningstar’s analysts view xAI’s moat as uncertain. At least for now, nothing about the Google and Anthropic contracts undermine this assessment.
