Google parent Alphabet has become the first company in the world to report more than $100 billion in quarterly profits, setting a new corporate record. In its second-quarter results released July 22, the company reported net income of $112.1 billion, nearly four times more than a year ago. According to Fortune, the figure represents more profits in three months than 459 Fortune 500 companies generate in total annual revenue. Helped by an 82% increase in Google Cloud revenue, Alphabet’s revenue rose 24% year over year to $119.8 billion. The record profits were also driven by massive gains from the company’s investments in artificial intelligence firm Anthropic and Elon Musk’s SpaceX.Google CEO Sundar Pichai said the results show the company’s “comprehensive approach to AI is delivering real, measurable value.”
Google recorded $99 billion in “other income”
A footnote in Alphabet’s second-quarter earnings release revealed that a large portion of the record profit came from $99 billion in “other income,” which included “realized and unrealized gains” from Alphabet’s investment portfolio. According to the company’s earnings report, these gains added $77.1 billion to its net income after taxes.Much of these investment gains came from Alphabet’s stakes in Claude maker Anthropic and Elon Musk-owned space company SpaceX, whose valuations rose sharply during the quarter.Alphabet has invested $300 million in Anthropic in 2023 and that investment has since grown significantly. The companies also have a cloud partnership under which Anthropic agreed to purchase large amounts of computing capacity from Google Cloud, supporting the rapid growth of the cloud business.Similarly, Alphabet owns about a 6% stake in SpaceX, which went public last month at a valuation of $1.77 trillion. These paper gains helped bolster Alphabet’s investment portfolio and fed into its bottom line.Despite the record profits, Alphabet shares fell about 3% in after-hours trading. Investors remained concerned about the company’s growing spending on AI infrastructure and growing competition for its Gemini family of AI models.