Benzinga·2025-12-12 17:55Core Viewpoint - The "Magnificent 7" tech giants are entering a critical phase in 2026, where they must demonstrate the monetization of their AI investments after three years of development and spending [1][2]. Group 1: AI Monetization Expectations - JPMorgan anticipates that the upcoming year will be the first significant test of whether the $400 billion spent on AI can translate into actual revenue, margins, and cash flow [2]. - Among the Magnificent 7, only Alphabet Inc, Amazon.com Inc, and Meta Platforms Inc are expected to show readiness for monetization in 2026 [2]. Group 2: Company-Specific Insights - Alphabet Inc (Google): - The only company in the Magnificent 7 showing a clear acceleration in AI monetization, with AI Search expected to enhance query volume, click quality, and pricing [3]. - The Gemini app has over 650 million monthly active users, and Google Cloud is projected to grow at over 40% [3][4]. - Amazon.com Inc: - AWS is expected to experience a surprising growth rate of 23% due to upgrades and partnerships, contrary to previous expectations [5]. - Retail fundamentals are improving, margins are expanding, and free cash flow is projected to double despite rising capital expenditures [5]. - Meta Platforms Inc: - Expected to enter 2026 with a 20% revenue growth driven by AI-enhanced advertising and the release of its first major MSL model [6]. - The monetization story is considered clean, as the ad engine is already generating revenue, with the model layer providing additional upside [6].