AI investments define a new era for ‘Magnificent 7’ companies

• NVIDIA emerges as the year’s most dramatic growth story while Amazon and Meta see AI payoff

The world’s seven tech giants—Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA, and Tesla—have closed their latest fiscal year on a dominant note, marked by surging investment in artificial intelligence (AI) and unprecedented capital expenditures.

The cohort, collectively referred to as the “Magnificent 7,” generated more than $2.08 trillion in revenue—a 14 per cent year-over-year increase—while recalibrating cash strategies and doubling down on technology for the next wave of digital transformation, according to GlobalData.

“The Magnificent 7 entered 2025 at an inflection point. The AI infrastructure boom underpins short-term earnings resilience, but aggressive valuations hinge on robust AI monetisation. US-China chip tensions could constrain hardware-dependent leaders like NVIDIA and Apple, while software giants may prove more resilien,” Murthy Grandhi, Analyst at GlobalData, said.

“The unfolding OpenAI alliance race—across Microsoft, Apple, and Alphabet—suggests ecosystem strength, rather than hardware alone, will underpin future moats.”

NVIDIA leads growth

Among the leaders, NVIDIA emerged as the year’s most dramatic growth story, more than doubling revenue to $130.5 billion, fueled by insatiable demand for GPUs powering hyperscale AI deployments across global cloud platforms.

The surge crowned NVIDIA with a historic distinction: it became the world’s first public company to achieve a $5 trillion market capitalisation in October 2025.

Amazon also delivered robust top-line results, driven by the reinvigoration of AWS and operational gains in its merchandising core, while Meta and Microsoft logged double-digit growth, reflecting successful pivots toward cloud and AI-enabled services.

Alphabet’s performance was anchored by its dominance in search and a rapidly scaling cloud business. Even as Apple’s revenue growth slowed to 6 per cent—a reflection of mature iPhone markets—services and new technology verticals drove upside. Tesla, by contrast, saw revenues plateau at $97.7 billion, underscoring the maturing electric vehicle space and intensifying industry competition.

R&D and capex hit record highs

A key storyline across the Magnificent 7 is unprecedented R&D intensity. Amazon led the sector with a staggering 88.5 billion R&D outlay, integrating AI innovations across retail, logistics, and AWS. Alphabet’s 48.8 billion spend focused on its Gemini AI and data-center optimisation, while Meta boosted its R&D by 19 per cent to $43.6 billion—a strong bet on AI and mixed reality despite ongoing losses in its metaverse division.

Microsoft and Apple, too, hiked their R&D budgets, with investments in generative AI, custom silicon, and device intelligence. NVIDIA’s outlay scaled to $12.9 billion as it invests in the future of datacenter and AI acceleration, while Tesla’s spend shifted toward autonomous systems.

Capital expenditure across the group soared by 27 per cent year-over-year, nearing $265 billion. AI infrastructure buildout—particularly datacentres and compute resources—dominated priorities for Amazon, Microsoft, Alphabet, and Meta, while Tesla and Apple maintained targeted approaches aligned with manufacturing and product strategies.

NVIDIA, though a smaller player by capex, tripled its investment to grow supply-chain independence.

Liquidity from pandemic-era highs continued to normalise, with group cash and equivalents settling at $238 billion as the fiscal year ended. Amazon and Apple retained the largest war chests, but companies broadly channeled more resources into R&D and capex in pursuit of longer-term AI leadership.