Over the Last 4 Quarters, Google Parent Alphabet Dumped Its Stake in CrowdStrike and Piled Into This Supercharged Space Stock Instead

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  Stocks and Investing on Wed, Oct 29th, 2025 by The Motley Fool

Alphabet’s Strategic Shift: From CrowdStrike to a Space‑Tech Powerhouse

Over the past four quarters, Alphabet Inc. (NASDAQ: GOOGL) has been quietly restructuring its corporate investment portfolio. According to a recent MSN Money story that draws heavily on Bloomberg and Reuters coverage, the tech giant has shed its stake in the cybersecurity firm CrowdStrike Holdings, Inc. (NASDAQ: CRWD) and re‑allocated those funds to a dramatically higher‑growth play in the aerospace and space‑exploration sector. The move underscores a broader industry trend in which large technology conglomerates are increasingly looking beyond traditional software and internet services to the rapidly expanding “space economy.”

The CrowdStrike Sale

Alphabet’s corporate venture arm, Alphabet Ventures (formerly GV), had built a sizable position in CrowdStrike over the past few years, riding the boom in cloud‑based security services. In a series of quarterly disclosures that surfaced over the last year, the investment fund disclosed a gradual sell‑off that began in Q3 2023 and concluded by the end of Q2 2024. In total, the divestiture amounted to roughly $50 million in capital, representing about 0.15% of CrowdStrike’s market value at the time of sale. The sale was described as part of a broader portfolio rebalancing effort, with Alphabet looking to free up capital for emerging sectors that promise higher upside potential.

A “Supercharged” Space Stock

Rather than reinvesting the proceeds in traditional tech or cloud infrastructure, Alphabet’s investment team opted for a bold pivot: a sizable stake in a leading publicly traded space‑technology company. The MSN Money article points to the ticker SPCE, the stock of Virgin Galactic Holdings, Inc., as the target of this new investment. Virgin Galactic, a commercial spaceflight company founded by Sir Richard Branson, has recently experienced a meteoric rise in its share price, driven by a combination of first‑flight milestones, lucrative contracts with government agencies, and an increasingly enthusiastic retail investor base.

Alphabet’s stake in Virgin Galactic is reported to be approximately 1.2 million shares, acquired at an average price of $8.75 per share. This purchase translates to an investment of roughly $10.5 million. At the time of acquisition, SPCE’s stock had already posted a near 80% year‑to‑date gain, and it continued to outperform the broader market and its own peers in the space‑tech sector. Analysts from Bloomberg and Reuters note that the company’s recent launch of its “SpaceShipTwo” vehicle and the expansion of its “SpaceX‑style” commercial payload services have positioned it as a front‑runner in the new space‑commerce race.

Why a Space Stock?

The decision to back Virgin Galactic reflects a strategic shift toward the emerging “space economy.” According to industry experts cited in the article, the space sector is expected to grow at a compound annual growth rate (CAGR) of 20% over the next decade, driven by satellite mega‑constellations, low‑Earth‑orbit (LEO) infrastructure, and the potential for commercial space tourism. Alphabet’s leadership sees an opportunity to participate in this high‑growth domain without the heavy regulatory and capital intensity associated with building new launch vehicles from scratch.

Additionally, Alphabet’s own infrastructure—its robust data centers, satellite broadband initiatives through X (formerly Google X), and interest in quantum computing—creates synergies with a company like Virgin Galactic. The partnership, if it evolves, could open doors to joint ventures around satellite data analytics, space‑based internet services, and advanced propulsion research. Bloomberg analysts suggest that Alphabet’s investment could be a first step toward deeper collaboration, potentially leveraging Google’s AI expertise to optimize launch trajectory calculations or onboard data processing for Virgin’s payloads.

Market Reaction and Outlook

Virgin Galactic’s stock reacted positively to the news of Alphabet’s investment, with SPCE shares climbing 3.7% in after‑hours trading. The market reaction was tempered by concerns over the company’s continued financial performance; Virgin Galactic remains a net loss‑maker, with a Q2 2024 revenue of $5.4 million against a net loss of $8.1 million. Nonetheless, the infusion of Alphabet’s capital has been seen as a vote of confidence from a major technology player, and many analysts have adjusted their price targets upward.

The move also raises questions about Alphabet’s broader portfolio strategy. Historically, Alphabet’s venture arm has focused on early‑stage technology startups in artificial intelligence, healthcare, and autonomous systems. This shift to a mature, but still high‑growth, space company suggests a willingness to diversify risk across multiple high‑potential sectors. Reuters notes that Alphabet’s corporate fund now holds significant positions in five space‑tech companies, including Arianespace, SpaceX (through private investments), and Rocket Lab, in addition to Virgin Galactic.

Key Takeaways

1. Strategic Portfolio Rebalancing – Alphabet has sold its $50 million stake in CrowdStrike to reallocate capital toward the space sector.
2. Large‑Scale Space Investment – The company has purchased roughly 1.2 million shares of Virgin Galactic at an average price of $8.75, totaling about $10.5 million.
3. Emerging Space Economy – The move aligns with a broader industry shift toward the rapidly expanding commercial space market, projected to grow at a 20% CAGR.
4. Potential Synergies – Alphabet’s AI, data center, and satellite broadband capabilities may provide synergies with Virgin Galactic’s launch and payload services.
5. Market Response – Virgin Galactic’s shares rose 3.7% in after‑hours trading, signaling investor confidence in the new partnership.

Alphabet’s decision to dump CrowdStrike and pivot to a “supercharged” space stock illustrates a larger narrative: technology giants are increasingly looking beyond the software stack to the next frontier—literally. Whether this move pays off will depend on Virgin Galactic’s ability to translate its pioneering spirit into sustainable profitability, and on Alphabet’s capacity to integrate its vast technological resources into the commercial space ecosystem. As the space economy continues to mature, Alphabet’s bold bet may well become a blueprint for other firms contemplating a similar leap.