To The Moon

AI Giants' Revenue Growth is Accelerating, Not Slowing Down. Here's Why

Most AI giants except NVIDIA are expected to see accelerating rather than decelerating performance, according to Bloomberg consensus estimates. The growth rates of the five sample companies that we selected remain in expansion territory after bottoming out in 2023.

NVIDIA's fiscal year 2026 corresponds to the calendar year 2025. The growth rate of FY 2026 is expected to be 63.4%, and even if it slows down next year, it will still be at least 50% or higher. Broadcom's market-expected revenue growth is expected to rise from over 20% to 49%. 

In the large-cap cloud market, Amazon's cloud growth in 2026 is expected to break the 20% threshold, while Google Cloud is expected to accelerate from 32.1% to 33%. Microsoft's Intelligent Cloud is expected to rise from less than 25% to over 26%, with Azure's growth rate even higher, reaching 39% in the last quarter.

The acceleration of giants' performance is not unfounded: the gradual resolution of capacity bottlenecks and the natural growth of Remaining Performance Obligation to be fulfilled guarantee the release of these giants' future earnings performance.

Some potential catalysts in 2026 will bring more growth opportunities to AI giants:

1. Vertical AI applications: Vertical AI opportunities include AI coding, visual generation, Enterprise AI, and other apps with high user pay intent.

2. Commercialization progress, including increased ad loading rates for retail customers and tiered pricing for AI cloud services to businesses.

3. Increased penetration of screenless AI hardware. Some devices like AI watches, speakers, and glasses were of limited functionality before the AI era, but smart voice interaction has made these devices with no or small screens more useful. This industry development benefits from both the evolution of large models and the improvement of computing industry chains for small devices.

4. Preliminary development of world models, which is significant for the further development of future robots and autonomous driving.

5. This year might be a big year for AI company IPOs. If OpenAI or Anthropic goes public, it will bring rare opportunities for new stock subscriptions. In addition, the well-known data AI platform Databricks may also enter the capital market in 2026.

Although the AI industry is still growing rapidly, we believe that we should take a differentiated view of the sub-sectors within the industry.

The following are the types of companies we are not optimistic about：

1. Companies that only develop models without making specific products may face monetization difficulties in 2026.

2. AI startups relying on financing to survive with high leverage may expose problems if the funding environment tightens.

3. Slow-reacting traditional software companies whose processes are not agent-ized and only put a shell on large models developed by other companies.

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