Unrealized gains from private tech investments boost S&P 500 earnings growth by nearly 20 percentage points, masking core performance.
Microsoft, Amazon, and Alphabet reported significant unrealized gains from stakes in Anthropic and OpenAI, distorting their latest quarterly earnings. These gains, while boosting reported figures, do not reflect underlying business performance and are often excluded from non-GAAP metrics by analysts.
S&P 500 earnings growth drops from approximately 48% to 29% when excluding these private tech investment gains. Analysts view such gains as short-term fluctuations rather than sustainable drivers, typically omitting them from standard forecasts.
The trend highlights a growing divergence between reported earnings and core operational results for major tech firms.