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Big Tech AI investments drive $160 billion in quarterly profit gains
Major US technology companies, including Alphabet, Amazon, Nvidia, and Microsoft, recorded over $160 billion in pre-tax profit gains last quarter driven by the rising value of their investments in artificial intelligence firms. These gains, categorized as ‘other income’ in accounting, were significantly bolstered by the valuation surge of SpaceX following its listing.
Alphabet reported a more than twofold increase in other income to $97.9 billion, while Amazon saw its other income triple to $53.4 billion. Nvidia also benefited, recording $7.7 billion in other income, aided by its holding of approximately 123 million SpaceX shares.
Analysts have expressed concerns that these one-time equity valuation gains may obscure the actual profitability and core business performance of these tech giants. Experts suggest that such gains could make it difficult to assess real demand for AI services and may lead to a ‘base effect’ next year, where profit growth rates appear to decline as these massive one-time gains subside. The potential future IPOs of companies like OpenAI and Anthropic are expected to continue this trend of impacting Big Tech financial reports through equity valuation shifts.
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- [● 3 SOURCES] The upcoming potential IPOs of OpenAI and Anthropic are expected to increase the impact of equity valuation gains on Big Tech financial reports. www.tfmedia.co.kr · zdnet.co.kr
- [● 3 SOURCES] Nvidia recorded $7.7 billion in other income for the three months ending in July, partly due to holding approximately 123 million shares of SpaceX. www.tfmedia.co.kr · zdnet.co.kr
- [● 3 SOURCES] Alphabet's other income reached $97.9 billion for the three months ending in June, more than doubling from the previous quarter. www.tfmedia.co.kr · zdnet.co.kr
- [● 2 SOURCES] Ben Schneider of Goldman Sachs questioned whether reported growth is based on actual demand or is distorting the reality of business performance. www.tfmedia.co.kr · zdnet.co.kr
- [● 3 SOURCES] Amazon's other income increased more than threefold to $53.4 billion during the same period. www.tfmedia.co.kr · zdnet.co.kr
- [● 3 SOURCES] Alphabet, Amazon, Nvidia, and Microsoft saw pre-tax profits increase by over $160 billion due to gains from AI equity investments. www.tfmedia.co.kr · zdnet.co.kr