AI cloud giants got a big earnings boost from “other income”

In short: Some of the biggest AI and cloud companies reported stronger profits partly because investments they hold in private AI startups rose in value.

What's going on

Alphabet, Amazon, Microsoft, Meta, and Oracle, often called “hyperscalers” (very large cloud computing providers), reported strong earnings for the first quarter of 2026. Investors have focused on their rising spending plans for data centers and chips, with Morgan Stanley estimating these companies could spend over $800 billion in 2026 and about $1.1 trillion in 2027.

But the Financial Times pointed to another factor inside the earnings reports, a line called “other income.” This can include changes in the value of investments, not just money from selling products or services.

Alphabet reported $37.7 billion in “other income” in Q1 2026, which was more than half of its net profit for the quarter. Amazon reported nearly $16 billion, up from $2.7 billion a year earlier, and it was close to half of its net profit. Microsoft reported $942 million in the quarter, and $7.2 billion over the past nine months. Oracle reported none, and Meta reported a $1.1 billion loss in this category.

Goldman Sachs analysts said Alphabet and Amazon together recorded $53 billion in “other income” in Q1 2026. They said $49 billion of that was explicitly tied to equity stakes in private companies, meaning the companies revalued their ownership stakes upward (like updating the price tag on an asset you already own).

What to watch

This boost can go both ways. If private AI companies like Anthropic or OpenAI are valued lower in the future, “other income” could shrink or turn into a loss, which would make reported profits look weaker.

Source: Financial Times