"Investing in Big Tech companies used to be simple and straightforward. You could simply scoop up a basket of the five Internet giants- Apple, Amazon, Microsoft, Meta and Google's parent firm Alphabet-and count on them to outperform the market. Their share price didn't move strictly in tandem, but you could expect a close sector-wide correlation. Now, in the AI era, all that's gone out the window."
"Three of the group are lagging slightly behind the overall S&P 500 index, which is on track for a roughly 16% gain this year. The group-Microsoft, Apple and Meta-is instead pacing at around 13%, 12% and 10% respectively. A fourth, one-time market darling Amazon, is floundering far behind with a miserable 1% gain. Then there is Google, whose current gains of around 62% make it one of the best performing stocks of 2025."
"This wild divergence among the biggest of the Big Tech players is directly tied to how well they are faring in artificial intelligence. In the last two years, AI has become an overriding fixation for investors, and led all five companies to spend eye-popping sums on talent and infrastructure. Google, though, appears to be the only one that has parlayed its investment into a winning business strategy."
Big Tech stock returns have diverged sharply in the AI era, with Google up about 62% in 2025 while Microsoft, Apple and Meta trail the S&P 500 and Amazon posts only a 1% gain. Investors have focused intensely on AI over the past two years, prompting massive spending across the five largest internet firms on talent and infrastructure. Google successfully converted its AI investments into a coherent business strategy that has driven outsized stock performance. Google experienced early AI missteps, including a Bard reboot and a problematic Gemini launch, yet still achieved strong AI-driven gains. The key question is whether the other four can match Google's AI execution and restore shareholder returns.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]