Goldman Sachs dispels major misconception on Google, Amazon earnings

Goldman Sachs warns that headline S&P 500 Q1 earnings growth is distorted by large investment gains at Amazon and Alphabet, masking weaker underlying profit growth across the index. Amazon booked a $16.8 billion pre-tax gain tied to its Anthropic stake and Alphabet reported about $37.7 billion in other income, lifting headline net income and EPS. Excluding those non-operating gains, Goldman estimates S&P 500 earnings growth falls from roughly 25% to about 16%, reducing the breadth of the rally and highlighting concentration risk in the Magnificent 7. The note implies investors should be cautious interpreting headline earnings strength as broad-based and consider the impact of a few mega-cap tech firms on index-level metrics and valuations.