Fourth-quarter 2025 earnings for Internet stocks were significantly impacted by increasing artificial intelligence (AI) investments. Meta Platforms (META) raised its capital expenditures to $115-$135 billion in 2026 to bolster AI initiatives, reflecting a broader industry trend as tech companies ramp up spending on AI infrastructure. This surge contributed to strong revenue growth for software analytics and cloud computing firms, alongside improved advertising demand fuelled by AI-powered recommendation algorithms.
Meta’s services now engage over 3.58 billion users daily, benefiting from enhanced user engagement driven by its AI recommendations. With a focus on upcoming earnings, four companies—Akamai Technologies (AKAM), Five9 (FIVN), Fastly (FSLY), and Spotify Technology (SPOT)—are identified as well-positioned to exceed earnings expectations this reporting cycle. Notably, Spotify anticipates revenues of €4.5 billion, a 13% year-over-year increase, while Fastly projects Q4 revenues between $159-$163 million with non-GAAP EPS of 4-8 cents.
Overall, the fourth quarter of 2025 highlighted a complex landscape for Internet stocks, characterized by strong AI integration and digital advertising resilience, although concerns about economic deceleration and trade tensions remain. Investors are advised to balance growth potential against macroeconomic uncertainties as they navigate this evolving market.
