Big Tech’s Profit Numbers May Be More Padded Than They Appear

Last quarter, most of Alphabet’s and Amazon’s pretax profit reportedly came from marking up private stakes such as Anthropic and SpaceX rather than from selling more products and services.
These are paper gains that can reverse if those valuations decline. Alphabet’s markup alone amounted to about 10% of the entire S&P 500’s second-quarter earnings.
At 27 times earnings, investors should consider how much of index profits comes from cash generation versus revaluations that can move in either direction.