In case you missed it, one of the most important data releases of the quarter hit the newswires on May 15: Form 13F filings. These filings provide investors with a way to track which stocks Wall Street’s savviest fund managers and businesses bought and sold in the latest quarter.
Google parent Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) is one company that’s required to file quarterly 13Fs for its $4 billion investment portfolio. While satellite-based cellular broadband services provider AST SpaceMobile (NASDAQ: ASTS) had been Alphabet’s No. 1 holding in each of the three previous quarters, this isn’t the case any longer. It’s been unseated by financial services giant CME Group (NASDAQ: CME).
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AST SpaceMobile still makes up more than 18% of Alphabet’s $4 billion portfolio
Although AST was dethroned as Alphabet’s largest investment holding, Google’s parent didn’t sell a share (it still holds 8,943,486 shares). This likely has to do with AST’s two core catalysts remaining firmly in place.
First, its BlueBird satellites work with existing smartphone technology. Whereas prior-generation satellite-based cellular networks required specialized devices, AST’s network is ready to roll with what consumers are already using.
Secondly, AST SpaceMobile has secured partnerships with more than 50 global mobile network providers. Instead of fighting an uphill battle against established wireless providers to earn subscribers, it’s partnering with them, giving AST access to 5.8 billion combined subscribers. In theory, this should lead to a rapid sales ramp as its satellite-based cellular broadband network expands.
At the same time, AST’s operating model is capital-intensive and has little margin for error. Higher satellite production costs and launch delays can adversely affect a stock that’s soared by more than 1,800% over the trailing two years.
Alphabet takes a billion-dollar stake in CME Group
While Alphabet exited six positions in the first quarter and opened three others, none was more of an eyebrow-raiser than the 3,484,020 shares purchased of financial services company CME Group — a stake worth $1.03 billion as of March 31.
As is typical, Alphabet almost exclusively invests in companies with which it already has working partnerships. Google announced an equity investment of $1 billion in nonvoting shares of convertible, preferred CME Group stock in November 2021. The duo also forged a 10-year partnership that’s seen CME rely on Google Cloud to host its trading system.
