S&P 500 profit margins hit record highs in Q2, but one company is doing a lot of heavy lifting

Corporate America just posted its fattest margins on record. The S&P 500’s blended net profit margin hit 15.7% in Q2, according to FactSet, eclipsing the previous high of 14.8% set just one quarter earlier. That number is staggering on its own, but roughly $77 billion of it came from unrealized gains on various investments, including its stake in SpaceX. Unrealized gains are, by definition, unrealized. And when a significant portion of the record margin traces back to paper profits on venture-stage investments, the durability of that particular contribution is worth questioning.