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Tech Giants Post Strong Q2 Results, Alphabet and Meta Platforms Shine
In the second quarter of 2021, tech giants Alphabet and Meta Platforms reported impressive growth, with Alphabet delivering a 14% increase in revenue and a 22% increase in diluted earnings per share (EPS). Meanwhile, Meta Platforms saw a 22% year-over-year increase in revenue, surpassing its predicted 13% growth.
Alphabet, the parent company of Google, trades at a discount to the broader market, with a price-to-earnings ratio (P/E ratio) of 19.7 times compared to the S&P 500's 23.8 times forward earnings. This is in contrast to Meta Platforms, which trades at 27.6 times forward earnings, reflecting its rapid growth.
Amazon, another tech heavyweight, also reported a 13% revenue increase in Q2. The rise in Amazon's operating income is due to increased efficiency and the growth of two segments: Amazon Web Services (AWS) and advertising. AWS' revenue rose 17% and advertising service revenue rose 23% in Q2.
Meta Platforms is investing heavily in artificial intelligence (AI), with AI ad creation becoming more popular and various AI initiatives driving increased interaction and conversion rates on its platforms. This investment in AI is likely to continue, as the company anticipates continued strength in Q3, with revenue growth expected to be about 20%.
Taiwan Semiconductor Manufacturing Company Limited (TSMC), a chip foundry that produces chips for big-time clients like Nvidia and Apple, also reported strong growth. TSMC's revenue rose by 44% year over year in U.S. dollars in Q2. However, no specific facts about TSMC's P/E ratio could be extracted from the provided information.
While the tech sector has been performing well, it's important to note that other companies outside of tech are also worth considering as investments. The article recommends the following companies as good investments: Nike, Pfizer, Campbell, Yum China Holdings, Thermo Fisher Scientific, Brown-Forman, Constellation Brands, West Pharmaceutical Services, Coloplast, and GSK.
In conclusion, the second quarter of 2021 has been a strong period for tech companies, with Alphabet, Amazon, and Meta Platforms all posting impressive growth. However, it's important to diversify investments and consider companies outside of the tech sector as well.
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