The communication services and technology sectors have been battered during the current bout of tariff-induced volatility. That’s due to their dependence on exports and exposure to international markets. That scenario has plagued AI equities. But investors may be overlooking some encouraging signs.
There’s no denying recent price action by AI-heavy ETFs like the Invesco QQQ Trust (QQQ ) and the Invesco NASDAQ 100 ETF (QQQM ) has tried investors’ patience and been unusually volatile. But some positive AI headlines remain. Equally important is these headlines are recent. And some of the related news flow pertains directly to some marquee QQQ/QQQM member firms.
Consider news out Thursday from Taiwan Semiconductor (TSM), which runs the world’s largest semiconductor foundry. The company said first-quarter sales surged 42% amid strong demand for AI and smartphone chips.
Why It Matters
Taiwan Semiconductor isn’t a QQQ/QQQM holding. But many of its biggest clients are components in the Invesco ETFs. That group includes Advanced Micro Devices (AMD), Apple (AAPL), and Nvidia (NVDA). Taiwan Semi also makes bespoke chips for Google parent Alphabet (GOOGL).
In other words, TSM’s first-quarter revenue trends vis-a-vis AI are encouraging. Importantly, those expenditures are being confirmed at the individual company level, including by Alphabet.
“In 2025, we plan to invest around $75B in total capex. This investment will be directed towards our servers and data centers, which include powering our AI compute and cloud business,” said CEO Sundar Pichai at the Google Cloud Next Conference 2025 on Wednesday.
Google’s Gemini AI has a well-known client in the form of fast-growing social media platform Reddit (RDDT), which is using Gemini to power its “Answers” section.
“With Gemini integrated into Reddit Answers, users can pose questions and receive curated summaries of relevant Reddit conversations, complete with links to communities and posts. This allows users to read snippets from genuine redditors, engage in full conversations, and ask follow-up questions,” according to a Wednesday statement issued by the firms.
Amazon didn’t get as specific as Alphabet regarding its near-term AI spending plans. But it is planning significant expenditures on that front and views AI as long-term game-changer.
“We continue to believe AI is a once-in-a-lifetime reinvention of everything we know. The demand is unlike anything we’ve seen before, and our customers, shareholders, and business will be well-served by our investing aggressively now,” said CEO Andy Jassy in a shareholder letter to investors.
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