Alphabet’s record profit swelled by Anthropic and SpaceX paper gains

Alphabet reported a record $112.1 billion profit for the second quarter, a result driven far more by investment gains than by Google’s search, YouTube or cloud businesses. Fortune reported that the 12-figure quarterly profit was the first in Alphabet’s history and may be the first by any company.

The Google parent said net income rose 298% from a year earlier. Revenue climbed 24% to $119.8 billion, while Google Cloud grew 82%, according to Alphabet’s quarterly earnings materials.

Chief Executive Sundar Pichai said the cloud results showed Alphabet’s “full stack approach to AI is delivering real, measurable value.” But the biggest factor behind the profit surge was a $99 billion entry in other income tied to Alphabet’s investment portfolio.

Alphabet said in a footnote to its earnings release that it recorded $99 billion in realized and unrealized gains on equity securities during the quarter. After taxes, those gains added $77.1 billion to net income, according to the company. They also accounted for $6.26 of Alphabet’s $9.11 in earnings per share.

AI bets drove the accounting gain

Fortune reported that most of the other income came from Alphabet’s investments in artificial intelligence companies, chiefly Anthropic and SpaceX. The company did not break out how much each holding contributed to the $99 billion gain.

Both companies had sharp valuation increases during the quarter, according to Fortune. SpaceX, in which Google owned about 6% at the end of 2025, went public in early June at a $1.77 trillion valuation. The Wall Street Journal had reported that SpaceX was valued at $400 billion as a private company a year earlier.

Anthropic’s private-market valuation rose from $350 billion to $965 billion over the same period, Fortune reported. Those higher valuations increased the carrying value of Alphabet’s equity holdings and flowed through its earnings statement as gains.

Alphabet’s Anthropic investment began in April 2023 with an initial $300 million stake, according to Fortune. The commitment has since grown to $13.3 billion, with up to $30 billion more in additional commitments.

As part of the arrangement, Anthropic has agreed to buy at least five gigawatts of computing capacity from Google Cloud, Fortune reported. Fortune compared that capacity with the output of five nuclear reactors and said it would be enough electricity to power about four million homes.

Shares fell despite the profit record

Alphabet shares dropped 3% in after-hours trading Wednesday, according to Fortune. Investors were weighing higher capital spending plans and competition facing Google’s Gemini AI models.

Alphabet raised its planned 2026 capital expenditures to a range of $195 billion to $205 billion, up from an earlier forecast of $180 billion to $190 billion, according to Fortune.

The relationship with Anthropic has also raised questions about how Alphabet’s investment gains and cloud revenue reinforce each other. Fortune reported that Alphabet’s capital can support Anthropic’s valuation, while Anthropic spends on Google Cloud capacity, boosting the same business segment investors are watching for AI growth.

Robert Willens, a tax and accounting consultant, told Fortune in April that it was notable Alphabet could “control or influence the value of one of their own assets.” His comment came after a smaller Anthropic markup accounted for nearly half of Alphabet’s first-quarter profit, according to Fortune.

This story draws on original reporting from Fortune.