Rubbish Check
CNBC Top News · 13 August 2026 source

“These charts show why stocks keep rallying. Profit margins are the highest on record”

R5/ 10
Selective
Rubbish Rating — 1 = base fact, 10 = pure rubbish
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In short
Rubbish Talk rates CNBC's claim that record profit margins explain the stock rally a 5/10 because the "record" figure is a conditional, blended estimate substantially inflated by Alphabet and Amazon's one-time paper gains on their Anthropic stakes, a detail the headline omits even though the article body partly addresses it.
The Verdict
Selective. The underlying FactSet number is real and the article does the work of showing the margin holds even without Alphabet and Amazon, but the headline's causal claim ("why stocks keep rallying") and its blanket "highest on record" framing skip past the fact that this is a preliminary blended figure still subject to revision, and that a chunk of the record net margin comes from non-operating investment markups rather than core business performance.

What actually happened

FactSet's John Butters reported the S&P 500's blended net profit margin at 16.9% for Q2, up from 14.8% in Q1 and 12.9% a year earlier, which would be the highest since FactSet began tracking the metric in 2009 if the figure holds through the rest of earnings season. Alphabet and Amazon are the two biggest contributors, both boosted by large non-operating gains tied to their equity stakes, but the article notes the S&P 500 margin still hits a record 15% even excluding those two companies.

Key facts

  • S&P 500 blended net profit margin ran at 16.9% for Q2, up from 14.8% in Q1 and 12.9% a year ago, and well above the five-year average of 12.4%.
  • If that 16.9% figure holds, it would be the highest net profit margin since FactSet began tracking the metric in 2009, meaning the record claim is provisional, not final.
  • Alphabet posted a $98 billion gain in other income, primarily from unrealized gains on equity securities, while Amazon recorded other income of $53.4 billion largely tied to its investment in Anthropic. Independent analysis confirms Alphabet's paper gain stems from marking its Anthropic stake to fair value under mandatory accounting rules, not operating performance.
  • Even after excluding Alphabet and Amazon, the S&P 500 margin still looks impressive at 15%, which is also a record dating back to 2009, the strongest evidence the trend is broader than two mega-caps.
  • Eight of the 11 S&P 500 sectors are reporting higher margins than a year ago, led by technology, communication services, consumer discretionary and energy.

What to watch for

  • Whether the 16.9% blended figure holds as remaining Q2 reports come in, or drifts down as it has in some past quarters.
  • How much of Alphabet's and Amazon's Anthropic-linked "other income" reverses if that valuation cools, since both figures are unrealized mark-to-market gains rather than cash profit.
  • Whether the 15% ex-Alphabet/Amazon figure is the real story going forward, since that's the number least distorted by one-off equity markups.
About this scoreThe R-Score is Rubbish Talk's editorial opinion on how far a headline's framing sits from what the underlying facts support. It is a judgement about presentation and emphasis, not an allegation that any outlet has acted dishonestly. Every figure we rely on is linked under Receipts so you can check it yourself.
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