Reports from Nvidia and Walmart last week wrapped up Q1 earnings season, and the numbers were fantastic — or appeared so at first glance.

Why it matters: Strong profits can justify the stock market's ability to continue to climb, despite the Iran war and the risks it presents.

State of play: The S&P 500 is up roughly 9% since the start of fighting in late February and is hovering near record-high levels.

By the numbers: Companies in that benchmark index produced earnings per share of $80.75 in the first quarter — up 28.4% from that quarter a year ago, according to FactSet data.

Context: That's the fastest growth rate for the market since 2021, when reopening from the pandemic enabled companies to trounce puny profits from the previous year, when the economy was still in lockdown.

Yes, but: There are growing questions about whether these numbers are being inflated — perhaps misleadingly — by the animal spirits driving the AI boom.

The fine print: The largest contributors to the surging growth in S&P profits during the quarter were Alphabet, Amazon and Meta, according to FactSet analyst John Butters.

The intrigue: These three companies also each reported unusually big contributions to their profit from sources outside their core business.

• Google parent Alphabet's profit number included a $37.7 billion windfall, mostly due to the rising value of its ownership stakes in other companies. Alphabet didn't disclose precisely what investment produced that paper gain, but the company is known to be an investor in Anthropic.
• Amazon, however, did disclose that its investment in Anthropic produced a $16.8 billion accounting windfall that contributed to its giant Q1 profit.
• Meta also reported a gain of $8 billion, thanks to a nonoperating tax benefit.

The big picture: These are not small numbers.

• Meta's tax benefit — which stemmed from a Treasury Department ruling — was about the same size as Costco's entire full-year profit in 2025.
• Alphabet's nonoperating gain was bigger than Walmart's entire net income last year.
• Amazon's Anthropic windfall eclipsed Goldman Sachs' annual profit in 2025.

Threat assessment: If AI asset values fall sharply, those paper gains could reverse just as quickly — and ripple through broader equity markets.

The bottom line: What gets written up can also be written down.

Elon Musk claims SpaceX can tap into a $28.5 trillion market for its business, the largest "in human history," per the company's prospectus.

Why it matters: It's an astoundingly huge number — only slightly less than U.S. gross domestic product, which is the value of everything the biggest economy on Earth produces.

Zoom in: In the IPO filing, SpaceX says it has a total addressable market, or TAM, of $28.5 trillion.

• That's the maximum potential revenue the company could make if SpaceX were to land every potential customer in existence (and it explicitly excludes Russia and China, the world's second largest economy).
• The bulk of the number comes from the company's AI business, estimated at a potential $26.5 trillion.

For the record: The estimate doesn't capture the revenue potential of colonizing Mars, a stated milestone in the prospectus.

Yes, but: OK, to be fair, SpaceX is not simply saying that it can somehow sell to nearly all of the U.S. economy. It provides services across 164 countries, after all.

• Fine. Global GDP is nearly $111 trillion — so the company is looking only to capture about a quarter of all the economic activity of the planet.

Reality check: Even in that context, SpaceX's number appears wildly ambitious.

• "In one word, it's farcical," says Ryan Cummings, an economist and chief of staff at the Stanford Institute for Economic Policymaking.

Caveat: An estimate like this is by its nature imprecise — it's an optimistic take on the potential for your business.

• And Musk is certainly known for tossing big numbers into the mix. He famously promised to cut $2 trillion from the federal government's budget. He did not.

Flashback: Others have reached for the sky in their TAM estimates. Uber in its 2019 IPO prospectus estimated a $5.7 trillion global market in ride-hailing, which as Robert Cyran of Reuters Breakingviews noted, would equate to "essentially ⁠all journeys made in 175 countries, including public transit."

Between the lines: In theory, the SEC will scrutinize and comment on exaggerated claims, says Dorothy Lund, a professor at Columbia Law School who studies securities law. "That's very unlikely here."

How it works: SpaceX says it can create new "multi-trillion-dollar" markets across space, AI and something it calls "connectivity," essentially the satellite internet services provided through its successful Starlink business.

• "We believe space represents the largest economic frontier in human history. Our innovations and technological advancements are redefining existing industries and creating new market opportunities."

Should it hit a targeted $1.75 trillion valuation, SpaceX would have a price-to-sales ratio that tops every company on the S&P 500, beating out by far the likes of Nvidia and even Tesla.

Why it matters: A high number is a sign that investors are pricing in astronomical growth.

By the numbers: With a market cap of between $1.75 trillion to $2 trillion, SpaceX would have a price-to-sales ratio of about 90 times to 103 times on a trailing 12-month basis.

• Palantir has highest current price-to-sales ratio at 63 times, based on data from S&P Capital IQ.
• Musk's Tesla has a price-to-sales ratio of 16 times.

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Editor's note: The story and chart data note have been corrected to show SpaceX's ratio is based on a $1.75 trillion valuation (not $2 trillion).