Alphabet Inc. (NASDAQ:GOOG) has taken its first concrete step toward its long-term vision of putting data centers in orbit, launching a prototype TPU satellite to test whether its AI chips can withstand the radiation, heat, and vibration of space. The effort is still at the engineering stage and does not represent a commercial system yet.
Still, whether Google, Nvidia, or another hyperscaler ultimately leads the push toward orbital computing, Space Exploration Technologies Corp. (NASDAQ:SPCX) could benefit from additional orbital AI experiments if companies continue choosing its launch services.
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Google Tests Whether Its TPUs Can Survive in Orbit
Google’s Project Suncatcher launched its first prototype satellite aboard SpaceX’s Transporter-18 mission on October 1, 2026, in partnership with Planet. The test will examine how Google’s Tensor Processing Units handle launch stress, radiation, and extreme temperatures in low Earth orbit. Testing on the ground has already shown that Trillium TPUs can handle radiation levels higher than those expected across a five-year mission, while simulated launch vibration tests have also been completed successfully. Heat management remains a key challenge because conventional air cooling does not work in a vacuum, prompting Google to evaluate heat pipes and radiators. Its broader vision is to connect satellites with laser links and create orbital computing clusters, with a two-satellite test planned for 2027. Google has emphasized that the current mission is intended to collect engineering data rather than demonstrate a commercial system. SPCX could have more to gain from orbital AI than just the launch, and you’ll want to see why Jim Cramer is paying attention.
What It Means for SpaceX: A Launch-Agnostic Winner
SpaceX could serve as a launch provider for competing orbital-computing projects. Google’s prototype launched aboard a SpaceX rideshare mission, alongside the launch vehicle’s broader role as the dominant platform for commercial satellite deployments. This also aligns with SpaceX’s own interest in orbital computing, as the company has separately pointed to Earth’s power constraints as a reason to explore space-based AI infrastructure. If multiple hyperscalers continue testing the concept independently, SpaceX can benefit from launch demand across the field, rather than relying on the success of any one chip architecture. But is SpaceX a better investment than Rocket Lab? Our SPCX vs. RKLB comparison reveals which stock has the stronger financial position.
SpaceX’s Valuation Rests on Its Own Bold Targets
At about 45x forward sales and a value of over $2 trillion, SpaceX is priced for far more than launching other companies’ experiments. Investors are paying for growth that management itself has set very high. Elon Musk said SpaceX expects to reach a $100 billion annual revenue run rate by December, more than three times its pace last quarter. However, SpaceX’s cash flow tells a different story. Musk also moved the company’s $1 trillion revenue target up to 2030. If SpaceX hits that $100 billion mark, the stock would trade at closer to 20 times its run-rate revenue. That’s still steep, but far easier to justify. The issue is that part of that target depends on new deals and acquisitions coming through. SpaceX does have the cash to keep building, being net cash positive by over $60 billion. However, the company faces substantial capital requirements, with second-quarter spending on capital expenditures reaching approximately $18.4 billion. To me, the stock will rise or fall on whether SpaceX delivers its own targets.
Institutional interest in Google is rising, with hedge fund ownership increasing from 265 funds at the end of Q1 2026 to 275 funds at the end of Q2 2026. The increase suggests professional investors are adding exposure as Google expands further into AI. SpaceX also has broad institutional backing, with 119 hedge funds among its institutional holders. Short interest stood at 2.76% of float as of August 31, 2026.
Google’s test represents a genuine early milestone for technology. SpaceX has already benefited from launching Google’s prototype and could capture additional launch demand if orbital AI projects expand. However, the financial contribution remains uncertain and depends on future launch contracts.
While we acknowledge the risk and potential of SPCX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SPCX and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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