AI Startup Stakes Inflate Big Tech Earnings
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- Amazon reported earnings up more than 240% year-over-year, but excluding a $53.4 billion gain "primarily from" its Anthropic investment, underlying growth was closer to 17%.
- Alphabet saw bottom-line growth surge nearly 300%; without mark-to-market gains from its roughly 5% SpaceX stake and its Anthropic investment, the increase would have been around 23%.
- Microsoft captured roughly 10 percentage points of earnings growth from a $3.2 billion net income gain "mostly from" Anthropic, plus a separate $480 million mark-up on its OpenAI stake.
- S&P 500 earnings growth for the quarter ran approximately 48% year-over-year, but stripping out private-company stake gains from just Alphabet and Amazon, the aggregate figure falls to roughly 29%, much closer to the 24% consensus forecast.
- Anthropic and OpenAI, each valued just south of $1 trillion in private markets, have filed confidentially with the SEC and are expected to list within the next year — which would convert these volatile mark-to-market gains into more permanent equity positions.
- Gil Luria of D.A. Davidson warned the mark-to-market dynamic cuts both ways, noting SpaceX is down roughly 50% from its post-IPO high and Alphabet is likely to face a "big reversal" when reporting the September quarter.
Why it matters: Stripping out mark-to-market gains from Anthropic, OpenAI, and SpaceX stakes, S&P 500 earnings growth falls from ~48% to ~29% — much closer to the 24% analyst consensus. Because mega-cap tech already accounts for roughly 35% of S&P 500 second-quarter revenue, that distortion flows directly into the benchmarks investors rely on to gauge corporate health, and per Luria, the same mechanism can reverse sharply when private marks move the other direction.
