As a tech giant with numerous business lines, robust profitability, and strong free cash flow, Alphabet (GOOG / GOOGL) routinely uses its own funds to invest in public companies. By the end of the second quarter, its equity investment portfolio included 36 companies, with a total value exceeding $2.1 billion. Looking back over the past four quarters, a significant shift is evident in Alphabet’s investment moves: it completely exited its long-held position in cybersecurity company CrowdStrike (CRWD), while simultaneously establishing a substantial new position in a space-related stock that has performed strongly this year. This strategic adjustment of exiting one investment and entering another reveals an evolution in its investment logic.
Alphabet initially invested in CrowdStrike through its independent growth fund, CapitalG, with their collaboration dating back to the Series C funding round in 2015. Since its IPO in 2019, CrowdStrike’s stock price has surged cumulatively over 700%, demonstrating exceptional performance. Therefore, Alphabet’s decision to liquidate its entire position after such a significant price increase can be seen as a classic profit-taking move.
CrowdStrike’s core appeal lies in its AI-integrated cybersecurity solutions, such as generative AI tools capable of detecting threats and platform services that secure AI applications. Its Falcon cloud security platform is even directly embedded by Nvidia into its infrastructure to safeguard the entire lifecycle of large language models. For the 2024 to 2025 fiscal year, the company maintained revenue growth of nearly 30%. However, its recent performance guidance failed to meet market expectations, coupled with its high price-to-earnings ratio of 140, which likely prompted Alphabet’s decision to exit.
Furthermore, Alphabet plans to acquire competitor security cloud platform Wiz for $32 billion and integrate it into Google Cloud. This major strategic move potentially reduces the necessity of holding equity in an external cybersecurity company.
While reducing its stake in CrowdStrike, Alphabet established a new position in satellite communications company AST SpaceMobile (ASTS) by the end of 2024, acquiring over 8.9 million shares. This company is focused on building a cellular broadband network in space, aiming to eliminate terrestrial communication dead zones and ultimately provide seamless 5G connectivity services to global users.
Although AST SpaceMobile’s current revenue scale is limited, it plans to launch 45 to 60 satellites next year to provide network coverage for key markets like the United States, Europe, and Japan. The market has shown strong confidence in its prospects, with the company’s stock price soaring over 234% year-to-date, bringing its market capitalization close to $26 billion. Investing in such a company also carries inherent risks: including a weak revenue base, high valuation, and reliance on regulatory approvals from multiple countries. Currently, the company has received conditional approval from the U.S. Federal Communications Commission to launch 20 satellites, but it still faces challenges such as obtaining full approvals, executing satellite launches, and competition from rivals like SpaceX.
Alphabet’s investment in AST SpaceMobile aligns with its core interests: growth in the global internet user base would directly expand the potential user base for its products and services like its search engine and YouTube. Therefore, this investment serves not only financial purposes but also holds strategic intent for ecosystem synergy.
From Alphabet’s recent investment adjustments, investors can observe its dual logic of balancing financial returns with strategic synergy. For individual investors, companies like AST SpaceMobile, which possess high growth potential but also come with high risks, can be allocated in moderation to the speculative portion of a portfolio. This allows participation in future growth opportunities while effectively managing overall risk.
