Half of the S&P 500's Earnings Jump This Quarter Came From Two Companies That Lose Money
About This Episode
Reuters Breakingviews reported August 3 that SpaceX and Anthropic — neither profitable — account for half the $280 billion rise in S&P 500 earnings this quarter, because Alphabet and Amazon book unrealized mark-ups on their stakes as income. Amazon's quarterly net income tripled on a $53.4 billion non-operating gain from Anthropic; Alphabet's EPS rose about 300%, or roughly 23% once the AI stakes are stripped out. Index-wide earnings growth falls from 47.4% to 28.8% without those two companies.
Our Take
The AI buildout's profits are increasingly an accounting entry — Alphabet and Amazon marking up stakes in two money-losing startups — so the question is not whether abundance is coming but whether the ledger financing it can survive the first quarter someone marks it back down.