Operating Income of the Magnificent Seven

 

In 2025, Microsoft overtook Apple in terms of operating income. But Nvidia is gaining fast.

The Revenue Growth of the Magnificent Seven

 

During this decade, AI chip supplier Nvidia has grown more than tenfold - far, far faster than the major tech giants. But, in absolute terms, Amazon and Alphabet have added more to the top line in the past five years.

The Revenues of the Magnificent Seven

When it comes to revenues, Amazon continues to run well ahead of the other tech giants. In 2025, the aggregate revenues of the Magnificent Seven was 2,373 billion US dollars, up 16% on 2024. In 2024, the aggregate revenues of the Seven grew 12%.

More than One Million Robots now Work for Amazon

In a letter to shareholders, Amazon said it now has one million robots operating in fulfilment centres helping with stowing, picking, sorting and intra-facility transport. The online retailer also reported that Prime Air, its drone delivery service, now has a design that will scale, "with plans to serve communities with 30 million customers by year-end, and expects to deliver half a billion packages by the end of this decade (with an aim to deliver inside 30 minutes)."

Written by CEO Andy Jassy, the letter also noted that AWS’s annual AI revenue run rate was more than 15 billion US dollars in the fist quarter of 2026. Jassy said the second version of Amazon's custom AI silicon (Trainium2) has about 30% better price-performance than comparable GPUs, and has largely sold out. Trainium3, which just started shipping at the start of 2026 and is 30-40% more price-performant than Trainium2, is nearly fully-subscribed, he added. 

"At scale, we expect Trainium will save us tens of billions of capex dollars per year, and provide several hundred basis points of operating margin advantage versus relying on others’ chips for inference," Jassy estimated. "Our annual revenue run rate for our chips business (inclusive of Graviton, Trainium, and Nitro—our EC2 NIC) is now over 20 billion dollars, and growing triple digit percentages year-on-year." 

If Amazon's chips business was a standalone business, and sold chips produced this year to AWS and other third parties (as other leading chips companies do), its annual run rate would be 50 billion dollars, according to Jassy. "There’s so much demand for our chips that it’s quite possible we’ll sell racks of them to third parties in the future."

Source: Amazon shareholder letter

Deutsche Telekom - Conservative on Capex

 

Alphabet Plans to Double Capital Spending

Alphabet, owner of Google, said it plans to invest between 175 billion to 185 billion US dollars in capex in 2026, up from 91.4 billion for 2025. 

In response to a question about what keeps him up at night, Sundar Pichai, CEO of Alphabet, said: "We've been on this AI-first trajectory for over a decade now, and it's what we've been methodically thinking our way through. It's the reason why we have been working on TPUs for over a decade, as an example. But I think specifically at this moment, maybe the top question is definitely around compute capacity, all the constraints, be it power, land, supply chain constraints, how you ramp up to meet this extraordinary demand for this moment. Get our investments right for the long-term and do it all in a way that we are driving efficiencies and doing it in a world-class way."

Alphabet said it is investing in "AI compute capacity to support frontier model development by Google DeepMind, ongoing efforts to improve the user experience, and drive higher advertiser ROI in Google Services, significant Cloud customer demand, as well as strategic investments in Other Bets," which includes its self-driving unit Waymo.

Alphabet said Waymo has surpassed 20 million fully autonomous trips and is now providing more than 400,000 rides every week. Source: Alphabet transcript

Baidu: Robotaxis have Reached a Tipping Point

Baidu said Apollo Go, its autonomous ride-hailing service, provided 3.1 million fully driverless operational rides in the third quarter of 2025, with year-over-year growth accelerating to 212% from 148% in the previous quarter.  In China, Apollo Go says it has achieved 100% fully driverless operations in all cities where it operates, including Beijing, Shanghai, Shenzhen, Wuhan, Chengdu, Chongqing, Haikou and Sanya, achieving "positive unit economics" in some of these locations. To date, Apollo Go fleets have accumulated 140 million fully driverless autonomous kilometres.

Apollo Go is aiming to expand globally. In Switzerland, Apollo Go has established a strategic partnership with PostBus, a public transport operator to launch an on-demand autonomous mobility service. Apollo Go said it has received fully driverless commercial operation permits in Abu Dhabi, , while in Hong Kong, Apollo Go expanded its open-road testing zone to include Kowloon and Kwun Tong District.

"In China, we are the undisputed market leader," Robin Li, CEO of Baidu, said on an earnings call. "Through the first three quarters this year, our ride volumes were over 15x higher than our nearest domestic peers according to publicly disclosed data....Scale matters a lot. The reason we are able to achieve a leading position in autonomous driving technology on a global basis is that we have the scale. We have encountered many issues, corner cases others have not seen. We were able to train our models to handle those cases and become smarter and smarter."

Arguing that robotaxis have reached a tipping point, both in China and in the U.S, Li suggested that word of mouth has created positive social media feedback, which will propel the opening or loosening of related regulations.  Source: Seeking Alpha transcript

Waymo says London is Calling

Announcing it plans to launch services in London in 2026, Waymo said its self-driving vehicles have now provided more than ten million paid rides in the U.S.  "Over the coming months, we’ll lay the groundwork for our service in collaboration with our fleet operations partner Moove, and continue to engage with local and national leaders to secure the necessary permissions for our commercial ride-hailing service in London," Waymo said.

It noted that Jaguar Land Rover's all-electric I-PACEs, outfitted with the Waymo Driver, are serving hundreds of thousands of fully autonomous rides every week in the U.S., and are currently driving in Tokyo as Waymo expands its international footprint.  Source: Waymo statement