Alphabet is a holding company that wholly owns internet giant Google. The California-based company derives slightly less than 90% of its revenue from Google services, the vast majority of which is advertising sales. Alongside online ads, Google services houses sales stemming from Google’s subscription services (YouTube TV, YouTube Music among others), platforms (sales and in-app purchases on Play Store), and devices (Chromebooks, Pixel smartphones, and smart home products such as Chromecast). Google’s cloud computing platform, or GCP, accounts for roughly 10% of Alphabet’s revenue with the firm’s investments in up-and-coming technologies such as self-driving cars (Waymo), health (Verily), and internet access (Google Fiber) making up the rest.

Meta is the largest social media company in the world, boasting close to 4 billion monthly active users worldwide. The firm's "Family of Apps," its core business, consists of Facebook, Instagram, Messenger, and WhatsApp. End users can leverage these applications for a variety of different purposes, from keeping in touch with friends to following celebrities and running digital businesses for free. Meta packages customer data, gleaned from its application ecosystem and sells ads to digital advertisers. While the firm has been investing heavily in its Reality Labs business, it remains a very small part of Meta’s overall sales.

Alibaba is the world’s largest online and mobile commerce company as measured by gross merchandise volume. It operates China’s online marketplaces, including Taobao (consumer-to-consumer) and Tmall (business-to-consumer). The China commerce retail division is the most valuable cash flow-generating business at Alibaba. Additional revenue sources include China commerce wholesale, international commerce retail/wholesale, local consumer services, cloud computing, digital media and entertainment platforms, Cainiao logistics services, and innovation initiatives/other.

We expect S&P 500 earnings to grow 12% this year and like companies that increase their dividends at a 10%-plus rate. How does the AI marketplace stack up against those metrics? Pretty well. Argus has derived a model of the size and scope of the global AI industry, based on our coverage of major publicly traded players and most mid-tier players, along with our industry knowledge of private players. We estimate that global AI industry annual revenue amounted to $250 billion in 2024, and expect that to grow at a 40% CAGR through 2030, when total revenue is forecast to reach $1.8 trillion. The emergence of China's DeepSeek, which caused a broad selloff in AI stocks, is a reminder that this space is dynamic and unpredictable. DeepSeek is reportedly inexpensive and powerful in achieving certain AI tasks. While pricing is important, companies in the AI space prioritize relationships, continuity, security, and reliability. The top priority for companies using AI delivered as-a-service across cloud is to ensure that delivery is secure, fast, and reliable -- and adding new vendors entails risk. U.S. government policy is highly likely to prevent wide dissemination of Chinese AI models in enterprise technology implementations in the U.S., given risks of "back doors" to Chinese military and intelligence. Non-U.S. nations are largely following similar policies, which should inhibit acceptance of Chinese AI models worldwide. Finally, AI hardware leaders such as Nvidia and AMD also offer GPU software libraries, model training, and inference services tailored to specific enterprise AI applications. The AI market is large and growing, and new entrants are expected to continue to disrupt the market.