Big Tech's Anthropic and OpenAI stakes are distorting the corporate earnings picture

CNBC says Big Tech’s reported earnings are being inflated by paper gains from stakes in private AI companies such as OpenAI and Anthropic, plus SpaceX in Alphabet’s case. Microsoft, Amazon and Alphabet all posted unusually large investment gains last quarter that boosted headline profits but did not reflect core operating performance. LSEG estimates S&P 500 earnings growth was about 48% year over year in the latest quarter, but would have been closer to 29% excluding these gains. That still exceeds the 24% consensus estimate, but the article argues the market should be cautious about reading too much into the headline beat. The effect is especially important because mega-cap tech makes up a large share of index revenue and earnings. The piece also notes these gains can reverse if private valuations fall, making future quarters more volatile.