rewrite this title and make it good for SEOAnthropic and SpaceX just handed Google the biggest profit quarter in company history—on paper | Fortune

That’s more profit in three months than 459 of the Fortune 500 companies generate in top line revenue in a full year.

What gives? Alphabet’s Q2 revenue increased by a very impressive 24%, to $119.8 billion, with the Google Cloud business reaching an 82% growth clip—results CEO Sundar Pichai called proof that the company’s “full stack approach to AI is delivering real, measurable value.”

Well, that—plus $99 billion in additional (or “other”) income that’s not directly produced by Alphabet’s day-to-day business operations such as search advertising and YouTube subscriptions.

A footnote in Alphabet’s Q2 earnings release provides a bit more insight about where these record-shattering profits came from. Alphabet booked $99 billion in “unrealized and realized” gains on the equity securities in its investment portfolio during the quarter—adding $77.1 billion to Alphabets overall net income after taxes, according. The investment windfall accounted for $6.26 of Alphabet’s $9.11 in earnings per share.

Most of the $99 billion in “other income” is from Alphabet’s AI investments, primarily Anthropic and SpaceX. Though it’s unclear how much each of the individual investments contributed to the $99 billion gain, both companies saw their valuations soar in Q2.

SpaceX, in which Google owned a roughly 6% stake at the end of 2025, went public in early June at a valuation of $1.77 trillion, up sharply from the $400 billion valuation it had as a private company a year ago. Anthropic, meanwhile, saw its private-market valuation jump from $350 billion to $965 billion in the same period. Those massive paper gains have bolstered Alphabet’s investment portfolio and flowed through to its bottom line.

Alphabet’s enormous paper windfall is the result of a prescient bet on Anthropic that began in April 2023, with an initial $300 million investment into Anthropic that has since grown to $13.3 billion, plus commitments of up to $30 billion more. As part of the arrangement, Anthropic has committed to purchasing at least five gigawatts of computing capacity from Google Cloud; roughly the output of five nuclear reactors, and enough electricity to power around four million homes. That spending flows into the very segment Wall Street watched Wednesday–that 82% growth Cloud growth.

Despite the record results, shares of Alphabet fell 3% in after-hours trading on Wednesday, as investors fretted about the company’s rising capital expenditures (Alphabet upped its planned 2026 spending to a range of $195 billion to $205 billion, from its previous estimate of $180 billion to $190 billion) and fierce competition facing its Gemini family of AI models.

And while the company’s AI investments delivered eye-popping net income numbers during the quarter, they may also raise circularity concerns. Each side of the relationship reinforces the other: Alphabet’s capital helps push Anthropic’s valuation higher; meanwhile, Anthropic turns around and spends billions of what it raised on Google Cloud computing power, helping to juice that blowout Cloud growth investors saw on Wednesday. So the same dollars go in a loop: Google invests in Anthropic, Anthropic pays Google for computing, Anthropic’s valuation climbs, and Google books the climb as earnings. 

“It’s interesting that they’re able to control or influence the value of one of their own assets,” Robert Willens, the tax and accounting consultant, told Fortune in April, when a smaller Anthropic markup drove nearly half of Alphabet’s first-quarter profit.