Big Tech's Anthropic and OpenAI stakes are distorting the corporate earnings picture
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- S&P 500 earnings growth hit roughly 48% year-over-year last quarter, but without mark-to-market gains from Alphabet and Amazon's private company stakes, growth would have been closer to 29%, per LSEG's Tajinder Dhillon — versus the 24% consensus analysts had forecast.
- Amazon posted earnings growth of more than 240% year-over-year, including a $53.4 billion gain "primarily from" its Anthropic investment; stripped of investment gains, growth was closer to 17%.
- Alphabet saw bottom-line growth surge nearly 300%, driven largely by its roughly 5% stake in SpaceX alongside its Anthropic holding; without those gains, growth would have been closer to 23%.
- Microsoft got about 10 percentage points of earnings growth from a $3.2 billion net income gain mostly attributable to Anthropic, plus a $480 million gain on its OpenAI stake.
- Anthropic and OpenAI are each valued just south of $1 trillion in private markets, have both filed confidentially with the SEC, and are expected to list within the next year — meaning the same mark-to-market dynamic could reverse if either valuation slips.
- Gil Luria of D.A. Davidson warned the dynamic cuts both ways: SpaceX is already down roughly 50% from its post-IPO high, which could force a large negative mark-to-market for Alphabet in the September quarter — though a successful September Anthropic IPO could offset that.
Why it matters: The Magnificent Seven already account for roughly 35% of S&P 500 revenue, so mark-to-market noise on a handful of private AI bets is now driving the index-level earnings story. Investors leaning on the headline 48% growth to justify AI-exposed tech valuations are effectively pricing phantom profits — and Luria's warning that SpaceX's 50% post-IPO drop will likely produce a reversal in Alphabet's September quarter shows how quickly the distortion can swing the other way.
