Alphabet's profit nearly quadrupled, but a $98bn gain on its investments drove most of it

Ninety-eight billion dollars. That was the net gain Alphabet reported on its equity investments in the second quarter, most of it unrealized, and it accounts for nearly all of the difference between a business that grew and a profit number that quadrupled. Net income available to common stockholders rose 298 percent, to $112.1bn, and diluted earnings per share reached $9.11, from $2.31 a year earlier. The operating business grew too, but at a different scale.

Revenue rose 24 percent, to $119.8bn, the twelfth straight quarter of double-digit growth. Google Cloud carried the story. Its revenue rose 82 percent, to $24.8bn, which Alphabet tied to demand for artificial intelligence infrastructure and its enterprise tools. Google Services revenue rose 15 percent, to $94.5bn, with Search and other advertising up 17 percent and YouTube advertising up 13 percent, the two businesses that still supply the bulk of what Alphabet earns. Operating income rose 30 percent, to $40.8bn, and operating margin widened to 34 percent from 32 percent.

Chief executive Sundar Pichai said the results showed the payoff of Alphabet's approach to AI. The number that will not repeat is the investment gain. Equity marks move with the market, they are not cash, and a quarter in which those holdings fell would run the very same line through the income statement in reverse. The operating figures are the ones that describe the company, and they held up on their own.