Mega-cap tech stocks, including Meta (formerly Facebook), Amazon, and Alphabet (Google), are identified as strong buys in the AI industry, with strong fundamentals and potential for double-digit growth and profitability.
Investors should consider buying strong, wide-moat companies like Alphabet, Amazon, or Microsoft instead of niche AI companies, as the biggest beneficiaries of AI may be those that use and benefit from the technology rather than those directly involved in producing AI products and services.
Several tech giants in the US, including Alphabet, Microsoft, Meta Platforms, and Amazon, have pledged to collaborate with the Biden administration to address the risks associated with artificial intelligence, focusing on safety, security, and trust in AI development.
Apple and Microsoft are arguing with the European Union over the designation of their services, iMessage and Bing, as "gatekeepers" under new EU legislation aimed at regulating Big Tech.
Apple's App Store, Safari browser, and iOS operating system have been designated as "gatekeepers" in the European Union, requiring adherence to strict new regulations aimed at curbing the power of major tech companies.
Tech giants like Alphabet, Apple, and Microsoft must comply with new regulations set by the European Commission (EC) to allow users to remove preloaded apps and use alternative options, in order to maintain competition in the market or face penalties of up to 10% of their global turnover.
The EU has designated six tech giants, including Alphabet/Google, Amazon, Apple, ByteDance, Meta Platforms, and Microsoft, as "gatekeepers" subject to the Digital Market Act, aiming to promote fairness, competition, and transparency in core digital services. This regulation could have a wide-ranging impact on Apple's services business, potentially forcing changes to the App Store's revenue share model, increasing competition and pricing pressure for Apple Music and iCloud, and altering revenue sharing agreements with third-party subscriptions on iOS. The DMA threatens to weaken Apple's control and profitability across its services segment.
Amazon, Google, and Microsoft are predicted to be the top beneficiaries from generative artificial intelligence, with Apple falling behind, according to investment firm Needham Securities.