Amazon's Q2 Profits Bolstered by Unrealized Gain on Anthropic Stake
Amazon's reported $62.6 billion net income for Q2 is a stark departure from its usual operating profit margins, driven largely by an unrealized markup on its nonvoting preferred stock in private company Anthropic.
The $50.5 billion gain represents 1.8 times the combined operating profits of Amazon's retail, advertising, and cloud businesses, and accounts for 62.4% of pre-tax income.
Stripping out this markup, pre-tax income would have been around $30.4 billion, a growth rate of roughly 46%, rather than the 288% reported.
The company's stake in Anthropic is valued at approximately $190 billion, or about $17.65 per Amazon share, which translates to around 6.9% of its market value.
Anthropic's impending IPO could significantly impact Amazon's earnings, as the company's reported profits become more sensitive to another company's share price in both directions.