U.S. Internet Giants: "Build High Walls, Accumulate Grain, Secure the Throne" | Year-End Summary Series (7)

Originally, American internet companies entered the "cycle" earlier than Chinese internet companies. This wave of so-called growth is, to some extent, also a cyclical dividend of the American economy.

However, what truly boosted their market share was the improvement in recommendation systems brought about by generative AI. It allowed companies like Meta to narrow the gap in content matching accuracy with TikTok, leading to the success of Reels; it also enabled advertising giants like Google and Meta to enhance the precision of ad matching, increasing their market share in internet advertising.

In addition to the revenue logic, it is also helping these giants improve efficiency, allowing IT engineers to write more code in the same amount of time, resulting in increased revenue that does not correspond to hiring.

However, in this process, the short-term corresponds to an arms race in AI capital expenditure. Looking at these companies from the perspective of 2025, I believe they may have stable positions, but the mismatch in their investment and output cycles is no longer friendly enough.

The capital from 2024 will gradually begin to depreciate, and the shipment of NVIDIA's B series in 2025 means that their capital expenditure cannot be reduced and remains at a high level.

Unless they can truly create a higher revenue logic using AI, the short-term mismatch in investment and output means that most of the internet giants in the U.S. stock market have been fully priced.

I do not expect the U.S. internet stocks to continue to yield excess returns in 2025.

Annual Highlights Review:

《 Google Soars? Learning from Meta, Competing for Excellence》

《 Meta: Is the Nightmare of Plummeting Coming Again? More Frightening than Thrilling》

《 Microsoft: AI Only Sees "Spending" and Not "Returns"》

《 Google: Haunted by Little Demons? AI Solves Thousands of Worries》

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