Thoroughly analyze the latest financial results of the US stock “Mag7” for “Magnificent 7” and “Magic 7”!
This article uses automatic translation for some of its parts
As this fiscal season comes to an end, $Microsoft(MSFT.US$ 、 $Apple(AAPL.US$ 、 $NVIDIA(NVDA.US$ 、 $Alphabet-C(GOOG.US$ 、 $Amazon(AMZN.US$ 、 $Meta Platforms(META.US$ 、 $Tesla(TSLA.US$The seven big techs called “Magnificent 7 (7 spectacular brands),” which include, also announced their respective 1st quarter financial results reports.
Looking at each company's business in detail, it became clear that the ratio of cloud services and AI to the big tech business is increasing. Also, each company's ability and investment in AI has come to have an impact on each company's performance and earnings, and stock price trends are also being influenced to some extent.
Artificial intelligence (artificial intelligence, AI) is gradually evolving from a “story” to a “new engine,” and it is driving big tech's business expansion and stock price trends in earnest. The “magic of AI” is becoming a reality.
Overall, $NVIDIA(NVDA.US$ 、 $Microsoft(MSFT.US$ 、 $Alphabet-C(GOOG.US$ 、 $Meta Platforms(META.US$ 、 $Amazon(AMZN.US$ Sales are strong, and sales, net profit, and other performance indicators have risen compared to the same period last year, exceeding market expectations.
Meanwhile, Tesla's performance was poor, global sales and net profit both declined, and free cash flow also showed the appearance of a “management crisis.”
It became clear in each company's financial results that what drives the business growth of Microsoft, Google, and Amazon, which are leaders in cloud computing, is demand for tools and services using generative AI. Even Meta, which is not developing a cloud business, has seen a significant increase in advertising revenue due to AI.
● $Amazon(AMZN.US$ Amazon Cloud Services (AWS) sales increased 17% to 25 billion dollars. Andy Jassy, the president and CEO of Amazon, pointed out in the financial results report that the growth of AWS was driven by modernization of infrastructure and enhancement of AI functions.
● $Microsoft(MSFT.US$Sales of the cloud business exceeded 35 billion dollars, an increase of 23% from the previous year. Among them, sales of Azure and other cloud services increased 31%, and AI services contributed to 7 point growth.
● $Alphabet-A(GOOGL.US$Cloud sales increased approximately 28% from the same period last year to 9.57 billion dollars, driven by strong performance of the Google Workspace product line.
$Alphabet-C(GOOG.US$The Chief Executive Officer (CEO) pointed out the strong performance of search, YouTube, and cloud computing. Google, which has demonstrated leadership in AI research, infrastructure, and broad coverage of global products, also stated that it is expected to be in an advantageous position against the next wave of AI.
● $Meta Platforms(META.US$Nearly all of the company's revenue (98%) comes from the digital advertising business, and AI is an important driver of the growth achieved in this business. Meta stated in its financial results report that Llama 3, which is the latest AI model, has been integrated into Meta AI, and it is expected that this AI will first be deployed in the English-speaking world, and it is expected that it will expand even more languages and countries in the next few months.
● $Microsoft(MSFT.US$Sales of the cloud business exceeded 35 billion dollars, an increase of 23% from the previous year. Among them, sales of Azure and other cloud services increased 31%, and AI services contributed to 7 point growth.
● $Alphabet-A(GOOGL.US$Cloud sales increased approximately 28% from the same period last year to 9.57 billion dollars, driven by strong performance of the Google Workspace product line.
$Alphabet-C(GOOG.US$The Chief Executive Officer (CEO) pointed out the strong performance of search, YouTube, and cloud computing. Google, which has demonstrated leadership in AI research, infrastructure, and broad coverage of global products, also stated that it is expected to be in an advantageous position against the next wave of AI.
● $Meta Platforms(META.US$Nearly all of the company's revenue (98%) comes from the digital advertising business, and AI is an important driver of the growth achieved in this business. Meta stated in its financial results report that Llama 3, which is the latest AI model, has been integrated into Meta AI, and it is expected that this AI will first be deployed in the English-speaking world, and it is expected that it will expand even more languages and countries in the next few months.
From the AI wave that began with Big Tech to the present day, there is a clear divergence in the market performance of each company. NVIDIA, Meta, Microsoft, and Amazon surged in stock prices in the first quarter and outperformed the market.
Also, competition is intensifying, even for big tech that has surpassed market performance. According to the survey, Microsoft and Amazon have invested a total of over 40 billion dollars in AI-related projects and data center projects around the world. Furthermore, during the quarter, other big techs expanded capital investment and raised full-year capital investment guidance.
Bernstein predicts that the total capital investment of the five big tech companies Amazon, Microsoft, Google, Meta, and Apple will exceed $1 trillion over the next 5 years, and most of that will be invested in AI chips and data centers.
Also, the bank estimates that the capital investment amounts of the five Big Tech companies mentioned above for this year alone will be on the scale of 200 billion dollars. In the past, investment in fixed assets such as real estate, servers, and network equipment accounted for the majority of Big Tech's capital investments, but with the rapid growth of the generative AI market, Big Tech's investment targets have shifted to AI-related equipment.
— MooMoo News Zeber
Source: Bloomberg, Moomoo
This article uses automatic translation for some of its parts
Source: Bloomberg, Moomoo
This article uses automatic translation for some of its parts
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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