Alphabet Sets Record with $112 Billion Profit, But Watch for SpaceX Stock Decline

Alphabet's recent quarterly earnings have set a record for the company, but it's not all good news. The tech giant posted a net income of $112 billion, making it one of the most profitable quarters in history.

A significant portion of this profit came from Alphabet's investment in SpaceX, which was valued at $94.1 billion as of June 30. However, accounting rules require that Alphabet report these gains as net income, even if they didn't sell any shares.

This means that when SpaceX's stock declines, Alphabet's net income will take a hit. Since the end of Q2, SpaceX's stock has declined by over 30%. But it's not all bad news - Alphabet's operating income, which excludes investment gains, rose an impressive 30% in Q2.

Google Cloud, Alphabet's fastest-growing division, saw its revenue rise 82% year-over-year and posted an operating margin of 35.6%. With AI spending expected to continue growing, analysts are bullish on Alphabet's stock.