AI-Driven Tech Giants Post Huge Profits, CEF Investors Grab Discounts and Dividends Up to 13%

Big Tech companies, such as Alphabet and Meta Platforms, are already profiting from AI investments. Communication-services and IT sectors led in profit growth in Q2 2025, confirming that AI makes money for Big Tech. Tech-focused closed-end funds (CEF) like BlackRock Science and Technology Term Trust (BSTZ), BlackRock Science and Technology Trust (BST), BlackRock Technology and Private Equity Term Trust (BTX), and Columbia Seligman Premium Technology Growth Fund (STK) have seen their net asset values rise, with BSTZ and BST leading the way. Despite their strong performance, these funds still trade at discounts to net asset value (NAV).

Title: Big Tech's AI Investments Pay Off, Boosting Profits and Fund Performance

Big Tech companies, such as Alphabet and Meta Platforms, are already reaping the financial benefits of their substantial investments in artificial intelligence (AI). The communication-services and IT sectors led in profit growth during the second quarter of 2025, underscoring AI's role in generating significant returns for these tech giants. Tech-focused closed-end funds (CEFs) like BlackRock Science and Technology Term Trust (BSTZ), BlackRock Science and Technology Trust (BST), BlackRock Technology and Private Equity Term Trust (BTX), and Columbia Seligman Premium Technology Growth Fund (STK) have seen their net asset values (NAVs) rise, with BSTZ and BST leading the way. Despite their strong performance, these funds still trade at discounts to their NAVs.

The latest earnings reports from major tech companies indicate a surge in AI-driven revenue growth. Microsoft (MSFT) and Alphabet (GOOGL) have both increased their capital expenditures (capex) significantly to meet the growing demand for AI services. Microsoft, for instance, announced a record $30 billion in capex for the current quarter, following better-than-expected sales and an above-estimate forecast for its Azure cloud computing business. This move highlights the company's commitment to AI as a primary growth engine [1].

Microsoft's Azure cloud computing business generated over $75 billion in sales in its last fiscal year, while its Copilot AI tools boasted over 100 million users. The company's strong AI adoption and performance have silenced any doubts about the demand for cloud and AI services [1].

Alphabet's Gemini AI assistant app has more than 450 million monthly active users, while OpenAI's ChatGPT has around 500 million weekly active users. These figures underscore the widespread adoption and popularity of AI technologies [1].

Meta Platforms (META) has also been investing heavily in AI, raising its annual capex forecast by $2 billion to a range of between $66 billion and $72 billion. The social media giant's core advertising business has shown strength, supporting these massive outlays [1].

The tech-focused CEFs have seen their NAVs rise, with BSTZ and BST leading the way. Despite their strong performance, these funds still trade at discounts to their NAVs, presenting potential opportunities for investors [1].

In summary, Big Tech's AI investments are paying off, driving profit growth and boosting the performance of tech-focused CEFs. The strong demand for AI services and the growing adoption of AI technologies suggest that these trends will continue, providing further opportunities for investors.

References
[1] https://www.reuters.com/business/retail-consumer/big-tech-may-be-breaking-bank-ai-investors-love-it-2025-07-31/
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L1N3TS00X:0-big-tech-may-be-breaking-the-bank-for-ai-but-investors-love-it/