Below is a roundup of last week’s notable industry news, with summaries and our opinions. More Q4 earnings and some clarity on winners and losers…

Amazon (👎): Revenue was up 14% to $213.4B, beating estimates. Ad revenue was up 22% to $21.3B. AWS revenue was up 24% to $35.6B, beating estimates and posting its fastest growth in 13 quarters. Amazon will spend $200B on AI in 2026, far exceeding Wall Street's $148.86B estimate. Investors worry about long-term ROI on that expenditure. Shares fell 11%.

Alphabet (👎): Revenue was up 18% to $113.8B, beating estimates. Ad revenue was up 13.5% to $82.3B, but YouTube ad revenue ($11.4B) fell short of expectations. Google Cloud revenue surged 48% to $17.7B, beating estimates. Alphabet will more than double AI spending to $175B-$185B in 2026, stunning Wall Street. Shares fell 3% in extended trading.

Reddit (👍): Revenue was up 70% to $726M, beating estimates. Ad revenue was up 75% to $690M, and up 74% to $2.1B for the entirety of 2025. Daily active users were up 19% to 121.4M. Reddit announced a $1B share repurchase program. The stock is down 38% in the past month amid a broader social media sell-off, but Reddit shares rose 5% on the earnings report.

Snap (👍): Revenue was up 10% to $1.72B, beating estimates. Total active advertisers increased 28%. Daily active users fell 3M from last quarter to 474M.  Snap+ subscribers rose 71%. Snap announced a $500M share repurchase program. Q1 revenue guidance missed estimates. Shares rose 2% in after-hours trading.

Spotify (👍): Revenue was up 13% to $5.39B, beating estimates. Monthly active users grew 11% to 751M, driven by growth in Latin America and Europe. Ad-supported users reached 476M. Premium subscribers grew 10% to 290M. Current quarter revenue guidance missed estimates, but shares popped 15%.

LiveRamp (👍): Revenue was up 9% to $212M, beating estimates. Net profit was $40M, up from $12M in Q4 2024, with “record operating margins.” CEO Scott Howe addressed investor concerns about AI disrupting the SaaS model, arguing AI is "a tailwind, not a headwind" for LiveRamp's data collaboration platform. Shares rose by single digits.

MNTN (👍): Revenue was up 36% to $87.1M for the CTV buying platform, beating estimates. MNTN turned profitable with $34.5M in net income vs. a $4M loss last year. MNTN attributed gains to AI, including an AI-powered targeting product and video creator, with an AI-driven media planning tool coming next. Shares popped as much as 46% in after-hours trading but have since come back down.

Fox (👎): Revenue was up 2% to $5.18B, beating estimates. Ad revenue was up 1%, boosted by a seven-game baseball World Series and higher sports and news pricing. Fox News and Tubi showed continued strength, but sports rights are eating into profits. Shares fell 3.6%. 

New York Times (👎): Revenue was up 10% to $802.3M, beating estimates. The Times added 450K digital-only subscribers, reaching 12.78M total subscribers. Digital ad revenue was up 25%. Current quarter guidance was solid, but investors are concerned about rising operating costs. Shares fell 6%🔒.

IAC/People (🤷): Revenue was down 10% to $646M, beating estimates. People's revenue was down 2%, but its digital revenue was up 14% to $355M, its highest growth rate in five quarters. People has lost 50% of its Google search traffic in the last two years. Shares rose before losing ground.

Opinion: Last week we said "AI giveth, but more so, AI taketh." This week proved that AI can taketh, and quite spectacularly.

Alphabet and Amazon both beat estimates with strong core growth. Yet Alphabet dropped 3% and Amazon plummeted 11%. The reason? AI spending so astronomical Wall Street can't see a path to reasonable returns. Alphabet is more than doubling AI spend to $175B-$185B in 2026. Amazon will spend $200B. Those levels make Meta’s $115B-$135B AI investment look small!

Meanwhile, companies without massive AI infrastructure bets—Reddit (+5%), Snap (+2%), Spotify (+15%), LiveRamp (+9%)—saw stocks rise despite mixed results. The market is favoring steady, profitable growth over AI moonshots.

The market is also liking “AI front-end” companies that are using AI as a tool for profits today, not infrastructure for maybe-returns tomorrow. MNTN's revenue jumped 36% and turned profitable. Meta positioned AI as a revenue driver for its ads business. People lost 50% of Google search traffic but grew digital revenue 14% by licensing content to AI companies and building direct audiences.

We have been calling AI infrastructure companies "AI earners" and AI front-end companies "AI burners" until now. But now AI infrastructure has become so expensive and competitive, with such distant payoffs, while the AI front-end is finally generating clear and present value at a much lower cost.

AI earners and AI burners have flipped!

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