AI Equity Gains Boost S&P 500 Q2 Earnings Growth to 52%
Nashnova编辑部
S&P 500 Q2 profits rose 52% year-on-year, but a large slice came from mark-to-market gains on Google's and Amazon's AI investments — strip those out and growth drops to 33%, a gap investors need to watch.
Inside that 52% — how much is paper profit?
S&P 500 Q2 profits jumped 52% year-on-year; the tech sector alone surged 74%.
Amazon's net income included $53 billion in non-operating pre-tax income, mostly from its Anthropic stake marked to market. Google booked $77.1 billion in unrealised equity-securities gains.
This means → much of the headline growth reflects rising valuations of AI holdings, not additional revenue earned or costs cut — it is paper wealth, not cash in hand.
What does the picture look like without the paper gains?
LSEG's head of earnings research, Tajinder Dhillon, estimates that stripping out mark-to-market gains brings Q2 profit growth down to 33%.
In plain terms = roughly one-third of the 52% headline number was propped up by AI investment gains on paper.
Even so, 33% is the strongest single-quarter performance since 2021 — the underlying fundamentals are not weak.
Why is Wall Street nervous about "good" numbers?
BofA strategist Savita Subramanian warned: "Mark-to-market gains can turn into losses just as quickly … it lowers earnings visibility."
In plain terms = when AI stock prices rise, these gains inflate profits; when they fall, the same line item drags profits down — the direction is largely outside management's control.
JonesTrading strategist Michael O'Rourke added: "The more earnings surge now, the more they set up disappointment in coming years."
This is not new — Q1 showed the same pattern
Q1 S&P 500 earnings growth was 29.4% with mark-to-market gains included, dropping to 22.3% without — a gap of about 7 percentage points.
This reflects a "magnifier effect" from AI investment gains that has now persisted for two consecutive quarters, with the Q2 gap even wider.
This means → if AI-related stocks pull back, reported earnings growth could narrow sharply in a future quarter.
Beyond AI windfalls, how did the rest of the market do?
Seven of the S&P 500's eleven sectors posted double-digit year-on-year profit growth; energy-sector earnings rose an estimated 143%.
Of the more than 450 constituents that have reported, roughly 85% beat analyst expectations — a broad beat, not a tech-only story.
Q3 estimates are being revised upward: analysts now forecast 29.2% growth, up from 27.6% at the start of July, with positive guidance outnumbering negative.
What is the key variable going forward?
One question dominates: can AI-related investment gains hold up through market volatility?
In plain terms = if AI stocks keep climbing, these paper gains will keep flattering profits; if they reverse, the amplified growth of recent quarters will snap back.
Goldman Sachs noted this month that AI-infrastructure stocks contributed roughly one-third of S&P 500 Q2 EPS growth — that ratio alone signals the degree of dependence.
Content is for reference only, not financial advice.