Happy weekend! It’s May 3, 2024. We have three great stories to wrap up the past few weeks in markets, business, and the economy for you and your family.

Here are the highlights:

• AI and advertising: The two words behind the continuing big tech boom.
• Big troubles for big chains. What Starbucks, McDonald’s, and Burger King are all saying.
• Consumer confidence hits two-year low. Here’s what’s going on in the economy.

AI and Advertising Are Big Tech’s Two Magic Words

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We’re now officially halfway done with the first-quarter earnings season — and no surprises, tech titans are cleaning up. In the last two weeks, reports from Meta, Amazon, and Google have demonstrated the staying power and strength of Big Tech, which has supercharged the market’s comeback since October. They also remained steadfast in their commitment to the two magical words making their billions possible: AI and advertising.

• What’s up with AI? While investors have been excited about the potential of AI, many investors don’t want to wait for it to start generating returns. Instead, they want to capitalize on the boom in other ways. This is one reaason why investors are turning away from more cyclical plays like semiconductors and energy — and embracing long-term bets on the growth of AI through tech giants who own big cloud businesses.
• Who owns the Cloud? Amazon (which owns Amazon Web Services), Microsoft (which owns Azure), and Google (which owns Google Cloud) all reported their best results ever, while crediting AI demand for some portion of their growth. Across those three companies, which own the most market share, quarterly cloud revenues neared $70 billion.
• What’s new with advertising? The digital advertising market continued to show up for tech giants like Meta (the parent company of Facebook and Instagram) and Alphabet (parent company of Google), which reported double-digit advertising revenue growth. And even Amazon, which only recently embraced the advertising business, demonstrated the strength of the market with its own double-digit performance.
• What does AI + advertising equal? Lots of profits. Over the last year, Big Tech companies turned away from growth — and settled for profits. For example, Google’s net income rose 57% year-over-year to $23.66 billion and Meta’s rose 201% year-over-year to $14.02 billion. As a result, both companies announced big buybacks — and declared their first-ever dividends for investors. And the rest of Big Tech also had big performances, too.

Why does it matter for EarlyBird families?

Big Tech continues to drive the market, but there is value in a diversified portfolio — which hedges against the downside, while capitalizing on the upside. This is what we build for families at EarlyBird, allowing them to catch the momentum in the market. It also makes sure that you’re positioned for the next big trend, whether that’s more growth in advertising or AI, or something completely new.

Big Troubles for Big Restaraunt Chains

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Americans spent like crazy through the pandemic — and the economy’s reopening. But after a banner few years of saving and spending, big food chains are warning that consumers are starting to pull back on their shaken espressos, large fries, and combo meals.

• What’s up with chains? In their first-quarter earnings, food giants like Yum Brands, McDonald’s, and Starbucks warned investors that economic pressures like inflation are beginning to weigh on consumers — which are spending less in turn.
• How bad are we talking? McDonald’s CEO Chris Kempczinski said that, “Consumers continue to be even more discriminating with every dollar that they spend,” while noting the impact on the industry — and company. McDonald’s same-store sales grew slower than inflation.