Alphabet quarterly profit surged to $112.1 billion in the second quarter, a first for the company and possibly any publicly traded firm, with net income up 298% year over year.
That level of earnings in three months exceeds the full-year revenue of 459 companies in the Fortune 500, according to the company’s presentation. Revenue climbed 24% to $119.8 billion. Google Cloud was a standout, growing 82%, which Chief Executive Sundar Pichai said reflected the company’s full stack approach to AI delivering measurable value.
The bottom line was propelled by $99 billion in additional income not tied to routine operations such as search ads or YouTube subscriptions. A footnote in the quarterly report shows Alphabet recognized $99 billion in unrealized and realized gains on equity securities in its investment portfolio during the period. After taxes, those gains added $77.1 billion to net income and contributed $6.26 of the company’s $9.11 in earnings per share.
Alphabet quarterly profit buoyed by AI-linked investments
Most of the $99 billion in other income stemmed from Alphabet’s stakes in AI-related businesses, principally Anthropic and SpaceX, both of which saw valuations leap in the quarter. While the precise contribution of each investment was not disclosed, both experienced sharp repricing.
SpaceX, in which Google held about a 6% stake at the end of 2025, went public in early June at a valuation of $1.77 trillion, up from roughly $400 billion a year earlier when it was private. Anthropic’s private valuation rose from $350 billion to $965 billion over the same span. These paper gains lifted Alphabet’s investment portfolio and flowed through to earnings.
Alphabet’s exposure to Anthropic began with a $300 million investment in April 2023 and has since grown to $13.3 billion, alongside commitments of up to $30 billion more. As part of their broader arrangement, Anthropic agreed to procure at least five gigawatts of computing capacity from Google Cloud. That is comparable to the output of about five nuclear reactors and enough electricity to power around four million homes. The associated spending supports the cloud unit’s rapid growth.
Despite the record figures, Alphabet shares fell 3% in after-hours trading on Wednesday. Investors appeared concerned about higher capital expenditures, with the company lifting its 2026 capex plan to a range of $195 billion to $205 billion from $180 billion to $190 billion, and about intensifying competition facing the Gemini family of AI models.
The company’s intertwined AI strategy may also invite questions about circularity. Alphabet’s funding has helped raise Anthropic’s valuation. Anthropic, in turn, spends billions on Google Cloud computing, supporting that segment’s expansion. As Anthropic’s valuation increases, Alphabet records gains on its investment, which then enhance reported earnings.
“It’s interesting that they’re able to control or influence the value of one of their own assets,” tax and accounting consultant Robert Willens said in April, after an earlier Anthropic markup significantly boosted Alphabet’s first-quarter results.
