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New York Times reports that in the finance world, few events test analysts' patience like four tech giants—Amazon, Microsoft, Meta Platforms, and Alphabet—publishing results within minutes. Recently these firms released earnings at the same time, creating a trillion-dollar shock across stock markets. What stands out is not a retreat but continued growth, with aggregate profit up about 60% year over year. Yet behind the gloss lies a paradox: higher profits are tied to a changing advertising business model, making the future harder to forecast.
Looking back to October 2020, Silicon Valley’s Big Tech group had a total market value around $5 trillion. In just a few years, that figure more than doubled to $11.82 trillion. The surprise is that scale does not dampen growth: Meta posted a 33% revenue increase, while the other three hovered around 20%.
However, the halo from revenue is no longer the sole measure of success. Five years ago, few focused on capital expenditure (CapEx) on AI data centers. Today, every dollar invested in AI data centers can move a stock. Meta and Alphabet increased capital expenditure to pursue AI ambitions; market reaction was mixed, with Meta dipping slightly after hours and Alphabet rising.
Mid-year, Meta and Alphabet raised investments to record levels: $145 billion and $190 billion respectively. AI is increasingly becoming the biggest driver of profits. In Google, AI-powered queries boosted search advertising revenue by about 19%. Microsoft’s AI-related revenue more than doubled, accounting for roughly 10% of total revenue.
AI is also reshaping the competitive playing field for smaller businesses. Loop, a maker of noise-canceling ear devices for live events, used Google AI tools to expand internationally. The system translated marketing content for non-English markets and placed ads abroad with country-specific keywords.
According to Madison & Wall, AI-related revenue across the sector jumped from $1 billion in 2022 to $35 billion last year, and is projected to reach $56 billion this year. Luke Stillman, CEO of Madison & Wall, said: “Google and Meta have already won; with AI they are pulling away from the rest. In this era, bigger is not only better in a proportional sense; it is better exponentially.”
The NYT notes that AI is driving a surge in digital advertising by rapidly processing vast amounts of information. It helps Google and Meta deliver more engaging content, increasing the number of ads shown. It also yields deeper insights into user preferences, improving targeting and reducing advertising costs.
Wesley ter Haar, AI director at Monks, said: “Anyone close to the field sees a real shift. The technology is ready to meaningfully replace manual efforts in our industry.” He also highlighted downsides: consumers see more ads and more personalized ads, raising privacy concerns. Advertisers have less control over where ads appear and how effective they are.
Stillman added: “The process is fuzzier, but more money is flowing in because advertisers and users see benefits far outweighing the drawbacks.”
The Financial Times reports that as the AI race deepens, current financial results matter less for long-term strategy. Zuckerberg and Pichai pursue AI far beyond human capabilities. Microsoft is building a cloud empire to run that world, while Amazon is placing bets on satellites as AI chip demand grows at a triple-digit pace.
Goldman Sachs argues that three-quarters of the S&P 500’s current value comes from cash flow expected ten years from now, rising to 84% for high-growth stocks. This means the stock market increasingly reflects long-horizon beliefs rather than short-term accounting.
However, focusing on the long term is a double-edged sword. The ongoing race raises questions about who will win rather than just what happened last quarter. Ironically, this does not reduce stock volatility. Goldman notes that for a tech company, shifting a single percentage point in long-term growth can slash enterprise value by as much as 29%. The signal of dominance—or loss of it—has become more important than quarterly numbers.
There is a data gap as AI makes reporting easier: investors must bet on long-term winners while signals become hazier behind huge growth numbers that lack predictive power.
Premium gym chains are entering a “golden era” that is ending or already in decline, as rising operating costs collide with shifting consumer preferences toward more flexible, community-based ways to exercise. Long-term memberships are shrinking, margins are pressured by higher rents and facility expenses, and competition from smaller, more personalized…
