Big Tech’s Record Profits Are Being Supercharged by Private-Market Markups

A huge piece of Big Tech’s record earnings is coming from paper gains on private investments.
Alphabet $GOOGL and Amazon together booked roughly $121 billion in investment-related gains last quarter, largely tied to stakes in companies such as Anthropic and SpaceX.
Those gains accounted for about 71% of Alphabet’s profit and 66% of Amazon’s profit.
The accounting is legitimate, but these are not the same as recurring operating earnings. If private-market valuations fall, those markups can reverse.
Strip away the investment windfalls and underlying S&P 500 earnings growth remains strong — but far less explosive than the headline numbers suggest.
Paying a growth multiple on profits driven by one-time valuation gains creates a very different risk profile.