The Smart Investor·2025-10-29 09:30Core Insights - US stock markets are nearing record highs, driven by tech giants like Amazon, Alphabet, and Microsoft, with expectations for continued growth in 2025 and beyond due to AI investments and rate cuts [1][2] Amazon - Amazon has evolved from a retail company to a leader in cloud computing, digital advertising, and logistics, with TTM revenue reaching US$670 billion, an 11% YoY increase [3] - The company's TTM net income grew 59% YoY, driven by higher-margin businesses like AWS and advertising, with AWS contributing over half of Amazon's total operating profit [4] - Despite increasing CAPEX leading to a decline in free cash flow, Amazon's investments are aimed at future growth, particularly in logistics automation and AI services [6][7] Alphabet - Alphabet is leveraging AI across its services, with a strong balance sheet and a recent US$13.6 billion share buyback in Q2 2025 [8] - Google Services segment revenue grew 12% YoY, maintaining a high operating margin of 40.1%, while Google Cloud's revenue surged 32% with improved operational efficiency [9][11] - Alphabet's annual free cash flow has remained above US$60 billion since 2021, despite a 61% YoY decline in Q2 2025 due to rising CAPEX [11][12] Microsoft - Microsoft is a leader in cloud computing, with its cloud business growing at 25% YoY in Q2 2025, and is integrating AI across its ecosystem [13] - The company maintains a higher operating profit margin compared to Amazon and Alphabet, and it also pays dividends and conducts share buybacks [15] - Microsoft's AI capabilities are monetized through enterprise productivity tools, contributing to quality growth with high margins [23]