Wall Street's latest earnings season has revealed another way AI is reshaping corporate America.
Beyond selling AI products or building data centers, some of the biggest companies are reporting massive accounting gains from the rising value of their stakes in AI startups. Those paper gains significantly lifted second-quarter profits across the S&P 500, making this one of the strongest earnings seasons since 2021.
Overall, S&P 500 earnings climbed 52% year over year, with the technology sector leading the charge after a remarkable 74% jump in profits. Even after stripping out investment gains from AI holdings, earnings still rose an impressive 33%, highlighting that corporate performance remains strong beyond the accounting boost.
Much of the attention centered on Alphabet and Amazon, whose investments in AI companies—particularly Anthropic—surged in value during the quarter. Under accounting rules, those unrealized gains flowed directly into reported earnings, inflating headline profit figures without generating new operating revenue.
Goldman Sachs estimates that AI infrastructure companies accounted for roughly one-third of the S&P 500's earnings-per-share growth during the quarter. That underscores how heavily the current earnings boom is tied to the AI ecosystem, from chipmakers and cloud providers to the startups attracting billions in investment.
Still, investors are becoming more cautious.
Markets continue to reward companies benefiting from AI, but questions are growing over whether these valuation gains are sustainable. Unlike revenue from products or services, mark-to-market investment gains can disappear just as quickly if startup valuations fall. Concerns over the enormous cost of AI infrastructure are also beginning to weigh on sentiment.
The AI boom is no longer just improving business operations—it is reshaping corporate earnings.
For the first time, the soaring value of AI startup investments is materially influencing the financial performance of some of the world's largest public companies. That makes AI a driver of both operational growth and balance-sheet gains.
Strong AI demand continues to fuel profits across multiple industries, from cloud computing and semiconductors to software and infrastructure. Companies with strategic investments in leading AI startups are also seeing significant increases in shareholder value.
Investment gains aren't the same as recurring business income. If AI startup valuations cool or funding slows, these accounting gains could reverse quickly, creating more volatile earnings reports and making it harder for investors to judge underlying business performance.
The AI economy is expanding beyond products and services.
Today, owning a stake in the right AI company can meaningfully lift quarterly earnings. As AI startups continue to command enormous valuations, corporate investment portfolios are becoming an increasingly important part of the AI story—and another reason why investors are watching the sector so closely.