Google’s $98B Anthropic, SpaceX Stake Gains Fuel Record Q2 2026 Profit
Alphabet posted a net income of $112.1 billion for the second quarter of 2026, a 298% jump year-over-year, after paper gains on its equity stakes in Anthropic and SpaceX added roughly $98 billion to the company’s bottom line. Alphabet’s own earnings release states that “other income reflected a net gain of $98.0 billion, primarily the result of net unrealized gains on our equity” holdings. The windfall pushed diluted earnings per share to $9.11, far above what Wall Street had modelled for Alphabet’s underlying advertising and cloud business.
The main source of the “other income” bump was a $99.03 billion gain on equity securities, up from just $1.29 billion in the second quarter of 2025, a figure that includes both realized and unrealized gains and losses. Alphabet’s filing notes that the $99.0 billion equity gain increased its provision for income tax, net income, and diluted EPS by $21.9 billion, $77.1 billion, and $6.26 respectively. Excluded from that one-off item, Alphabet’s core operating income still rose 30% to roughly $40.8 billion, according to the company’s own results.
Anthropic’s Valuation Triples to $965 Billion in a Single Quarter
Alphabet holds roughly a 14% stake in Anthropic, which saw its valuation triple from $380 billion to $965 billion during the second quarter after a $65 billion fundraising round that Anthropic confirmed in its official announcement. Because accounting rules force Alphabet to mark private minority stakes to market value every quarter, that single markup flowed straight into Google’s net income line without a dollar actually changing hands.
Bank of America had flagged the scale of the coming markup before Alphabet even reported, and Fortune’s own breakdown of the earnings footnotes found that most of the $99 billion in “other income” came from Alphabet’s AI investments, primarily Anthropic and SpaceX, though it’s unclear how much each individual holding contributed to the total gain. Alphabet first invested in Anthropic in 2023, and that initial $300 million bet has since grown into a stake worth $13.3 billion, with commitments of up to $30 billion more.
SpaceX Goes Public, Then Slides 33% Before Quarter’s End
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. That listing alone reset the carrying value of Alphabet’s stake for accounting purposes, contributing to the enormous Q2 markup even before the rocket company’s shares moved a single day in public trading.
The gains have already started reversing, however. CNBC reported that SpaceX shares have come down nearly 33% since the second quarter ended, a reminder that Alphabet’s “other income” line can swing just as violently in the other direction next quarter. In a separate wrinkle for the gaming and dev-tools world, SpaceX is working to complete the acquisition of AI coding startup Cursor for $60 billion by the end of the third quarter, according to CNBC’s live coverage of the earnings call.
Google Cloud’s 82% Growth Is the Real Story for Game Studios
Strip away the equity gains and the more durable news for developers sits inside Google Cloud, which studios increasingly lean on for game backends, matchmaking and AI-assisted tooling. Google Cloud revenue climbed 82% to $24.8 billion, driven by demand for AI infrastructure and enterprise AI solutions, while Cloud operating income reached $8.8 billion, up from $2.8 billion in the same period a year earlier. CEO Sundar Pichai said the acceleration was built on demand for AI infrastructure and solutions, adding in Alphabet’s official statement that “our AI investments are redefining what’s possible across every part of our business.”
Some of that growth is funding an even bigger AI infrastructure push that studios building on Google Cloud, Gemini or Anthropic’s models will feel directly. Alphabet raised its 2026 capital expenditure plans to a range of $195 billion to $205 billion, up from a prior estimate of $180 billion to $190 billion, and the company’s shares still fell 3% in after-hours trading as investors weighed the rising spend against fierce AI competition. On the developer side, Google’s Antigravity AI coding tool now has 2.4 million weekly active users, giving indie and AA studios another AI pair of hands alongside Anthropic’s Claude Code.
The Circularity Question Behind Google’s AI Profits
Analysts are increasingly flagging that Alphabet’s AI bets and its AI revenue are tangled together in ways that inflate both sides of the ledger. Fortune’s earnings analysis noted that each side of the relationship reinforces the other, as Alphabet’s capital helps push Anthropic’s valuation higher while Anthropic turns around and spends billions of what it raised on Google Cloud computing power, helping fuel that same blowout Cloud growth investors cheered this week. For a games industry that increasingly depends on the same handful of AI vendors for asset generation, code assistance and live-service infrastructure, that loop is worth watching as capex, valuations and cloud pricing keep climbing in lockstep.
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