AI Trade: Updated Net Income, Revenues, and Operating Incomes for US Mega Caps

The last two weeks has seen remarkable earnings beat for almost every big tech company associated with the AI buildout. The AI trade, which had remained stagnant for almost 6 months, roared back with a fury last month.

Although Nvidia, Broadcom, Micron, and Oracle do not report until much later, here are updated plots depicting net income comparison for U.S. mega cap tech companies, sorted by market cap. The scale of the y-axis is the same for each subplot to allow a fair comparison of net income across companies.

With the rise of Intel to over $500 billion in market cap, it became a natural addition to give an even 12 tickers. To make room, I removed Palantir, which has fallen substantially in market cap (and for which the individual bars were hard to see on this scale anyway).

Graphs were generated with Python Matplotlib. Once again, I've changed my data source, this time to WRDS/Compustat, which requires an institutional subscription. Notably, this provides data going back to 1990, which allows us to view this in the context of the dotcom boom and bust.

Although my favorite metric for mature companies is net income, because Compustat (and other easily accessible sources that I can automate) use GAAP net income, it significantly affects the following:

• Google and Amazon had huge GAAP net income from unrealized investment gains (mostly Anthropic).
• Most of these companies had significant stock-based compensation, which reduces GAAP net income, with a much more profound impact for the smaller companies.
• Several companies, most notably Meta, were significantly affected from one-time non-cash tax charge in prior quarters.
• Intel's GAAP net income has been primarily affected by several goodwill imparment charges, among other factors.
• Other companies, including Broadcom and AMD, are also substantially affected by amortization from recent acquisitions.

Because net income is an imperfect metric, I've also included revenue and operating income plots to provide a more organic representation of each company's growth rate less susceptible to unusual events.