Big Tech Stakes in Anthropic and OpenAI Are Inflating Corporate Earnings, Report Says

The surge in the value of unlisted shares held by companies like Microsoft and Amazon is artificially inflating the overall earnings of S&P 500 companies, making them appear far more robust than they actually are, U.S. economic broadcaster CNBC reported on August 3 (local time).

Tajinder Dhillon, head of research at financial data provider LSEG, noted that the earnings growth rate for S&P 500 companies in the second quarter rose 48% compared to the same period last year, adding that the overall growth would be much weaker if the valuation gains from unlisted AI company stakes were excluded.

Gil Luria, managing director at D.A. Davidson, stated, "The headline earnings figures on the surface have been significantly inflated by equity gains from OpenAI, Anthropic, and SpaceX."

Financial data provider FactSet reported that as of July 31, with 61% of S&P 500 companies having reported their quarterly earnings for the April–June period, the second-quarter earnings per share (EPS), based on reported figures and market consensus estimates for companies yet to report, is projected to increase by 47.4% compared to the same period last year.

FactSet added that excluding Microsoft and Amazon, the EPS growth rate drops to 28.8%.

However, given the dominance of mega-cap tech giants that already hold an overwhelming weight in the market, these earnings dynamics carry even greater significance.

According to LSEG, the stocks known as the "Magnificent 7" accounted for approximately 35% of total second-quarter revenues for S&P 500 companies.

The vast majority of Microsoft's $3.2 billion increase in net income came from its stake in Anthropic.

Microsoft also generated a $480 million gain from its stake in OpenAI.

Consequently, Amazon's earnings skyrocketed by over 240% compared to the same period last year, but excluding investment gains, its actual growth rate was close to 17%.

Alphabet, Google's parent company, saw its net income growth soar by 300%, but excluding investment gains from SpaceX and Anthropic, its growth rate stood at around 23%.

CNBC pointed out that these dynamics clearly illustrate how deeply unlisted AI companies are intertwined with big tech firms even before going public.

At the same time, some analyses suggest that even excluding the investment gain effects of big tech firms, the underlying earnings growth remains sound.

Jeff Kilburg, founder of KKM Financial, evaluated that the profit growth of mega-cap tech companies is "jaw-dropping" even without factoring in the valuations of unlisted stocks.

(Photo: AP, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.