Alphabet, the parent company of Google, reported in its July quarterly filing that its stake in private investments was worth $124.3 billion at the end of the second quarter, primarily attributed to one unnamed investment. Bloomberg has identified this investment as Anthropic, an artificial intelligence company known for its Claude models. Anthropic is expected to go public in November with a valuation target of around $2 trillion.
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While this could seem to indicate that Alphabet's stake may increase significantly, it is essential to recognize that the two figures represent different metrics. The $124 billion value reflects the last price at which investors bought Anthropic stock, while the $2 trillion figure represents the total value of the company.
Alphabet uses a specific accounting method for private companies, adjusting the valuation of its investment when observable transactions occur. Thus, the $124.3 billion is not Alphabet's estimate of Anthropic's worth but is based on the latest trading activity. In earlier reports, the valuation of this investment bucket fluctuated between $35.2 billion at the end of 2024 and $64.1 billion at the end of 2025, driven by the amounts paid by outside investors during funding rounds.
Anthropic reportedly postponed its initial public offering from October to November to give investors time to review third-quarter results. The company aims for a valuation of approximately $2 trillion and intends to raise up to $100 billion, although these figures are still speculative.
Although Alphabet has not disclosed its ownership percentage in Anthropic, the exact share may be less significant than it appears. If the IPO occurs, Alphabet's shares will reflect whatever market price is established, independent of the percentage it holds.
If successful, the IPO could allow Alphabet to adjust its stake into marketable securities, meaning it would be repriced according to the market value in subsequent quarters. Such changes would also impact Alphabet's financial reporting. In the second quarter, Alphabet's revenue increased by 24% to $119.8 billion, driven by an 82% spike in Google Cloud. However, much of the reported net income surge of 298% was attributed to unrealized gains on equity securities rather than direct cash inflow from increased operations.
While the potential IPO could expand the asset value on paper, it would not directly translate to cash or revenue gains unless Alphabet decides to sell shares. Investors should focus on Alphabet's core operating business. As of the latest data, the stock was priced around $338, with a price-to-earnings ratio of about 23 for next year's expected earnings. Moving forward, it may be prudent to evaluate Alphabet's performance excluding potential gains from the Anthropic investment.