The Tech Giants: A Colossal Force in the Market

The six biggest tech companies are now valued at over $11.3 trillion.
Add Nvidia, and the total surpasses $13 trillion.
This represents a whopping 31.3% of the S&P 500’s total valuation.

The seven largest tech stocks are worth half of the remaining 493 stocks in the S&P 500.
This dominance is huge but not compared to a country’s GDP.

The collective revenue of the Super Six tech giants exceeded $500 billion last quarter.
This is comparable to Thailand’s nominal GDP, around $495 billion.
Adding Nvidia brings it closer to Israel’s GDP, at $522 billion.
Extrapolating to an annual run-rate, it’s on par with Canada, at $2.14 trillion.

The Super Six generated approximately $110 billion in net income last quarter.
Apple led with a staggering $34 billion in profits.
Mark Zuckerberg envisions AI enhancing all products and services.
The Super Six CEOs believe AI will revolutionize user experience, community engagement, business interactions, and developer capabilities.

The CEOs express strong conviction in AI’s potential to improve various aspects of life.
AI promises world-class assistants, enhanced community engagement, better customer interactions, and advanced open-source models for developers.

Investors are optimistic about AI services.
Leading companies like Microsoft, Alphabet, and Nvidia are at the forefront of AI innovation.
Investors seek clues on which companies will benefit most from AI possibilities.

Tech giants are investing billions in AI development.
Meta plans expenses of $94-99 billion this year.
Amazon’s 2024 capex will notably rise, driven by increased infrastructure and AI investments.
Alphabet’s capital spending surged 45% to $11 billion and is expected to rise notably.
Apple, traditionally focused on incremental improvements, is now delving into AI with a significant opportunity ahead.

Satya Nadella of Microsoft emphasizes the shift from talking about AI to applying it at scale.
Microsoft’s AI spending is justified by a significant impact on Azure’s revenue growth.
Azure’s revenue grew around 30%, contributing to a better-than-expected top line for the Intelligent Cloud unit.

Analysts believe this is the beginning of a multi-year initiative with significant AI use cases.
Microsoft aims to lead in this potential $1 trillion opportunity.
The Magnificent 7’s growth rate suggests that even a trillion dollars might not secure a seat at their table.

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