Goldman Sachs US Technology Internet: Q4'25 EPS Review – Where to From Here?
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Goldman Sachs reviews the Q4 2025 earnings season for US internet and interactive entertainment companies, noting heightened volatility and predominantly negative year-to-date stock performance across the sector. Three dominant themes emerged from the reporting period.
First, AI capital expenditure continues to escalate dramatically, with Amazon, Google, and Meta providing 2026 guidance significantly exceeding market expectations, raising investor questions regarding return on investment pathways. Second, digital consumer behavior patterns established in late 2025 have persisted, though inflationary pressures from tariffs and oil prices remain uncertain. Third, growth-oriented companies are deliberately sacrificing short-term margins to fund long-term AI-driven opportunities, a dynamic now embedded in 2026 guidance.
Goldman Sachs presents a bullish scenario analysis for cloud computing, suggesting AWS could achieve approximately 31% revenue CAGR over four years versus current estimates near 23%, while Google Cloud could reach 45% versus 34%. However, the firm emphasizes these represent upside scenarios rather than base cases. Near-term industry conversations indicate cloud revenue performance will materially exceed current consensus.
In digital advertising, platforms with scaled AI products are capturing disproportionate share, with revenue growth substantially outpacing industry averages.
Goldman Sachs maintains Buy ratings on Amazon, DoorDash, Uber, Meta, Spotify, and Google. The firm identifies Roblox and Instacart as offering favorable risk-reward profiles. Spotify's May investor day represents a potential catalyst, while Uber's autonomous driving partnership strategy may be underappreciated by the market.