Google reports $98bn investment gain in quarterly earnings

Google's parent company, Alphabet, recorded a $98 billion unrealised investment gain during the second quarter, though the figure received little attention as investors focused on the company's soaring AI spending and future growth plans.

The gain appeared in Alphabet's latest earnings report under "other income", where the company said the increase came from unrealised gains on its investment portfolio. Alphabet did not identify which investments contributed to the windfall, and analysts did not raise the topic during the company's earnings call.

Investment portfolio delivers boost

Although Alphabet is not required to disclose the source of the gains, the increase is widely believed to reflect the rising valuations of companies in which it holds significant stakes.

Among Alphabet's best-known investments is SpaceX, where Google acquired about a 7% stake in 2015 when the aerospace company was valued at roughly $12 billion. Following its public listing last month, SpaceX is now valued at around $1.5 trillion.

Alphabet is also a major investor in AI company Anthropic, reportedly holding about a 14% stake. The company recently reached a valuation approaching $1 trillion after a major funding round. Google has also invested in data analytics firm Databricks, which was valued at $188 billion earlier this month.

AI spending remains investor focus

Despite the sizeable investment gain, investors paid closer attention to Alphabet's growing AI expenditure. The company recently increased its projected capital spending for 2026 to as much as $205 billion, with much of the investment directed towards AI infrastructure, including servers and data centres.

Concerns over those rising costs overshadowed the investment windfall, and Alphabet shares fell about 1% after the earnings announcement.

Even so, the company continued to deliver strong operating results. Quarterly revenue rose by nearly 25% compared with the same period last year, driven by continued growth in Google's advertising and cloud businesses, both of which are benefiting from increasing demand for AI-powered services.

Analysts remain broadly optimistic about Alphabet's long-term outlook despite the company's heavy investment cycle, viewing AI as a key driver of future growth.