Alphabet made more from its investments than from Google. It sold almost none of them.

I recently saw that Alphabet reported $112.2bn of net income last quarter while the actual business, ads and cloud, earned $40.8bn of it, so I looked into where the rest came from. It is a $99.0bn gain on investments, and only $278m of that came from selling anything. $77,354m of it is Alphabet raising the value of stakes it holds in private companies. I asked Eli Bartov, professor of accounting at NYU Stern, who advises money managers on financial reporting and has testified as an expert in securities fraud cases, what to make of a profit built that way. He said there is a risk management could use that discretion to influence reported gains or losses and achieve its desired reporting outcomes, potentially resulting in misleading information for investors. Alphabet can do this under ASC 321. With no share price to look up, you hold the stake at what you paid and move it only when someone else buys into the same company at a different price. So the value rises whenever a new investor pays more, and whether the company itself makes or loses money never touches your income statement. Over the first half of 2026 those markups grew $41.2bn while write-downs grew $295m, about 140 to 1. Microsoft has enough influence over OpenAI to use accounting that passes results straight through, and its OpenAI line reads minus $1.5bn, minus $4.8bn, then plus $6.5bn across FY2024 to FY2026. Bartov also put a number on it. Taxing the gain at the roughly 19% rate Alphabet paid for the quarter, he had about 70% of net income as non-recurring, and warned investors could overestimate its sustainable earnings power and bid the stock above fundamental value. He gave the fair counter too, that accounting rules have to work across thousands of companies and will never perfectly fit one, so the adjustment is the reader's job. Figures from the 10-Q filed 23 July 2026. Full write-up with all figures and data: [https://www.theresearchnote.com/articles/alphabet-99-billion-equity-gains-measurement-alternative](https://www.theresearchnote.com/articles/alphabet-99-billion-equity-gains-measurement-alternative)