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Amazon (AMZN 0.57%) is best known for its e-commerce empire and its highly profitable cloud arm, Amazon Web Services (AWS). The tech giant’s shares have rallied over the last year, lifting the company’s market cap to more than $2.3 trillion as of this writing. That strength reflects solid execution across the business and optimism about the company’s growing role in artificial intelligence (AI). Yet one driver often takes the back seat to AWS: advertising.

Advertising is now a sizable, fast-growing revenue line that benefits from Amazon’s unmatched data, the shopping intent of visitors, and its expanding media footprint. Further, ad revenue accelerated again in Q2, and recent management commentary points to more opportunity ahead. Put simply, advertising is an important reason the long-term investment case remains compelling.

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Advertising momentum keeps building

Amazon’s advertising services revenue rose 23% year over year to about $15.7 billion in the second quarter of 2025 (22% growth excluding currency impacts). This followed 18% growth in the first quarter (19% excluding currency impacts), showing healthy acceleration as the year progresses. Drivers include more shopping activity, improved ad tools and measurement, the ongoing rollout of Prime Video ads, and connected-TV (CTV) partnerships that broaden where Amazon can serve ads. Notably, Amazon highlighted a June integration with Roku, with the partnership reaching an estimated 80 million U.S. households. The company’s push into CTV expands advertiser reach beyond retail search into high-engagement streaming, where advertisers are willing to pay more for ad spots.

Together with retail search, brand and display placements, and its demand-side platform (DSP), Amazon is deepening the ways it can match advertiser goals with shopper intent and authenticated audiences across its sprawling digital services. In other words, the company isn’t just selling placements; it is selling performance.

Why advertising is key to the bull case

Advertising represents high-margin revenue layered on top of Amazon’s massive retail and media ecosystem. While the company does not disclose ad margins, the economics are attractive and scale with traffic, selection, and relevance improvements.

Although management doesn’t provide specific commentary on its advertising margins, it often implies that they are key to the company’s profit growth story.

“Advertising remains an important contributor to profitability” in both its North America and international segments, said Amazon CFO Brian Olsavsky in the company’s most recent earnings call.

While Amazon does not break out operating income for advertising separately, the high-margin nature of the business is a meaningful tailwind for overall profitability in North America and internationally. AWS, of course, remains the largest profit center, generating $10.2 billion of operating income in the quarter, but advertising is an increasingly important profit contributor that diversifies and helps stabilize the overall business through cycles.

It’s also worth noting that Amazon’s capabilities in advertising are difficult for rivals to replicate, given the company’s scale. So it wouldn’t be surprising to see Amazon continue gaining market share in advertising for years to come.

But this part of Amazon’s business comes with risks. Ad budgets are cyclical, and privacy and regulatory changes can impact targeting and measurement. Additionally, competition from other large advertising platforms remains intense. Meanwhile, Amazon stock’s valuation already bakes in healthy growth across its businesses. With a market cap in excess of $2.3 trillion, trailing-12-month sales approaching $700 billion, and net income of $70.6 billion for the same period, shares trade at a premium that assumes steady execution. But advertising strengthens the case that Amazon can sustain double-digit top-line growth and rising profitability alongside AWS over time.

AWS may be the more important profit engine today, but advertising is a quiet force that is enhancing Amazon’s profit engine. The business benefits from Amazon’s data and distribution, adds higher-margin revenue to retail, and opens new monetization surfaces in streaming. For investors evaluating Amazon’s long-term return profile, understanding the momentum and durability of advertising — not just cloud — is key.

The benchmark S&P 500 has recovered dramatically from a tariff-driven shock in April 2025, and is now trading close to record highs. “Magnificent Seven” stocks, in particular, have been the key driver of this mid-year rally. Increasing adoption of artificial intelligence (AI) globally, coupled with strong earnings performance, has been fueling investor confidence for these technology giants.

Semiconductor giant Nvidia continues to be the paragon of this ongoing AI boom. However, another company may soon become a Wall Street darling, as it is helping enable GPUs to work together efficiently in large AI clusters. That company is Arista Networks (ANET -8.77%).

Image source: Getty Images.

While most investors have been focusing on AI chips, networking is also equally important. AI training and inference (real-time deployment) workloads demand enormous clusters of GPUs, which can cost tens of thousands of dollars each. However, without fast, low-latency connections between GPUs, both the training of large AI models and inference at scale suffer from slower performance and higher costs. Arista is well positioned to resolve these challenges.

AI data center catalyst

Arista has established itself as a pure-play Ethernet networking company, delivering hardware and software networking solutions for large-scale AI data centers, as well as for campus and routing networks.

Until recently, Ethernet wasn’t considered strong enough for AI workloads. Instead, Nvidia’s InfiniBand technology was the go-to choice for scale-out back-end AI networks, linking racks of servers and accelerators in massive GPU clusters. Even in scale-up back-end AI networks (within a server rack), Nvidia’s proprietary high-bandwidth interconnect technology NVLink is used to connect GPUs for high-performance and low-latency networking. However, that seems to be changing now.

Ultra Ethernet Consortium (UEC) released its first full specification in June 2025, creating an Ethernet-based system designed for AI and high-performance computing (HPC) at scale. Since then, hyperscalers and enterprises have been migrating away from proprietary InfiniBand to open-source Ethernet. Over time, Arista also expects clients to migrate from NVLink to Ethernet/UALink networking in scale-up back-end networks.

Arista stands to benefit dramatically from this transition, as its Ethernet-based Etherlink portfolio (20-plus products launched since 2024), paired with its Extensible Operating System (EOS) operating system, is being increasingly preferred by data centers for scale-out networking.

The company already accounted for nearly 21.3% of the data center Ethernet switch market at the end of the first quarter 2025. As more AI workloads move to Ethernet, Arista is well-positioned to capture an even bigger share of the global data center AI networking market, estimated to be nearly worth $20 billion in 2025.

Customer base

Management is guiding for AI networking revenue to exceed $1.5 billion in 2025. That includes about $750 million from back-end AI networks alone, a dramatic improvement from absolutely nothing in 2022.

A major chunk of this $750 million revenue target is firmly supported by two hyperscaler clients, Microsoft and Meta Platforms, which have deployed 100,000 GPUs in distributed AI clusters. Each of these clients is expected to account for at least 10% of Arista’s revenues in fiscal 2025. The third hyperscaler client is also close to that scale, while the fourth hyperscaler client is on the way. With its sticky hyperscaler customer base, Arista enjoys significant near-term revenue visibility.

Arista is also expanding its customer base beyond hyperscalers. The company now caters to 25 to 30 enterprises and Neocloud customers (new generation of cloud providers) actively deploying AI clusters. While individually smaller than the big four hyperscaler clients, they are helping offset the slowness in ramp-up of the fourth hyperscaler customer and the loss of the fifth sovereign AI customer. The diversified revenue base has also helped reduce Arista’s overreliance on a smaller client base.

Other markets

Besides AI networking, Arista is also strengthening its position in enterprise campus and wide-area network (WAN) segments. The VeoCloud purchase gives Arista an AI-ready WAN portfolio that helps customers connect branch sites securely, while managing traffic flows more efficiently for AI workloads. Arista now expects its campus switching business to add $750 million to $800 million in revenues in fiscal 2025.

What about the valuation?

Arista shares trade at 47.4 times forward earnings, which is not cheap. Additionally, the company also faces competition from technology giants such as Nvidia and Broadcom, as well as from hyperscalers exploring in-house options in the networking space.

But Arista can still see its share price grow despite the high valuation multiples. The company’s software offerings, comprising EOS operating system and CloudVision network management and automation platform built atop EOS, helps improve networking performance. Since GPUs use high amounts of power, the networking software plays a critical role in reducing the overall GPU usage. Arista’s Ethernet also works across different accelerators, giving customers more flexibility.

The data center industry is gradually moving from a network connection speed of 400 gigabits per second of data to 800 gigabits per second of data. With its Ethernet-based networking products, robust software stack, and long-term customer relations, the company can capitalize on this opportunity. Hence, Arista can emerge as a major winner in the AI networking boom in the coming years.

Shares of little-known company Ibex (IBEX 36.38%) went parabolic today, shooting 41.1% higher in early-morning trading. The stock was still trading around 33% up at 1:15 p.m. ET Friday.

Ibex is a business process outsourcing company, providing a wide array of services such as customer and technical support, lead generation, surveys, and business intelligence and analytics.

Turns out, Ibex’s efforts to build a digital business have already started to pay off, and that is drawing attention to the stock today. The keyword here is artificial intelligence (AI).

Image source: Getty Images.

AI-driven growth

Ibex reported numbers for its 2025 fourth quarter and fiscal year (ended June 30) after the Sept. 11 market close. Ibex’s Q4 revenue jumped 18% year over year to $147 million, driven by strong growth in its top three markets: retail and e-commerce; healthcare; and travel, transportation, and logistics.

The real deal, however, is what Ibex’s full earnings report looked like:

• Record fourth-quarter and full-year revenue
• Highest revenue growth in 11 quarters
• Fastest revenue growth in three years for the full year
• Record free cash flow

These are big milestones, but they’re not really why Ibex stock is going to the moon. It’s these words from CEO Bob Dechant: “Importantly, this quarter marked the shift from proof of concept for our AI solutions to full-scale deployments, setting the table for future growth.”

Ibex is “transforming into a digital-first business” by leveraging AI through its Wave iX platform, which uses generative AI to improve customer experiences. Earlier this month, Ibex said it is targeting the government sector now.

What’s next for Ibex stock?

The company’s capital expenditures more than doubled to $18.4 million in 2025, driven by capacity expansion. Ibex generated record free cash flow of $27.3 million in the year and repurchased nearly 3.9 million shares, almost 23% of its outstanding shares.

Following Ibex’s strong earnings report, analysts at RBC Capital were quick to raise their price target on the stock to $39 per share from $31 a share. Ibex stock already hit an all-time high of $42.99 per share today.

With Ibex projecting 7.5% revenue growth at the midpoint for FY 2026 and capital expenditure of $20 million to $25 million on further expansions, this is one stock you should have on your radar.

When investors debate the future of the artificial intelligence (AI) trade, the conversation generally finds its way back to the usual suspects: Nvidia, Advanced Micro Devices, and cloud hyperscalers like Microsoft, Amazon, and Alphabet.

Each of these companies is racing to design GPUs or develop custom accelerators in-house. But behind this hardware, there’s a company that benefits no matter which chip brand comes out ahead: Taiwan Semiconductor Manufacturing (TSM -3.05%).

Let’s unpack why Taiwan Semi is my top AI chip stock over the next 10 years, and assess whether now is an opportune time to scoop up some shares.

Agnostic to the winner, leveraged to the trend

As the world’s leading semiconductor foundry, TSMC manufactures chips for nearly every major AI developer — from Nvidia and AMD to Amazon’s custom silicon initiatives, dubbed Trainium and Inferentia.

Unlike many of its peers in the chip space that rely on new product cycles to spur demand, Taiwan Semi’s business model is fundamentally agnostic. Whether demand is allocated toward GPUs, accelerators, or specialized cloud silicon, all roads lead back to TSMC’s fabrication capabilities.

With nearly 70% market share in the global foundry space, Taiwan Semi’s dominance is hard to ignore. Such a commanding lead over the competition provides the company with unmatched structural demand visibility — a trend that appears to be accelerating as AI infrastructure spend remains on the rise.

Image source: Getty Images.

Scaling with more sophisticated AI applications

At the moment, AI development is still concentrated on training and refining large language models (LLMs) and embedding them into downstream software applications.

The next wave of AI will expand into far more diverse and demanding use cases — autonomous systems, robotics, and quantum computing remain in their infancy. At scale, these workloads will place greater demands on silicon than today’s chips can support.

Meeting these demands doesn’t simply require additional investments in chips. Rather, it requires chips engineered for new levels of efficiency, performance, and power management. This is where TSMC’s competitive advantages begin to compound.

With each successive generation of process technology, the company has a unique opportunity to widen the performance gap between itself and rivals like Samsung or Intel.

Since Taiwan Semi already has such a large footprint in the foundry landscape, next-generation design complexities give the company a chance to further lock in deeper, stickier customer relationships.

TSMC’s valuation and the case for expansion

Taiwan Semi may trade at a forward price-to-earnings (P/E) ratio of 24, but dismissing the stock as “expensive” overlooks the company’s extraordinary positioning in the AI realm. To me, the company’s valuation reflects a robust growth outlook, improving earnings prospects, and a declining risk premium.

TSM PE Ratio (Forward) data by YCharts

Unlike many of its semiconductor peers, which are vulnerable to cyclicality headwinds, TSMC has become an indispensable utility for many of the world’s largest AI developers, evolving into one of the backbones of the ongoing infrastructure boom.

The scale of investment behind current AI infrastructure is jaw-dropping. Hyperscalers are investing staggering sums to expand and modernize data centers, and at the heart of each new buildout is an unrelenting demand for more chips. Moreover, each of these companies is exploring more advanced use cases that will, at some point, require next-generation processing capabilities.

These dynamics position Taiwan Semi at the crossroad of immediate growth and enduring long-term expansion, as AI infrastructure swiftly evolves from a constant driver of growth today into a multidecade secular theme.

TSMC’s manufacturing dominance ensures that its services will continue to witness robust demand for years to come. For this reason, I think Taiwan Semi is positioned to experience further valuation expansion over the next decade as the infrastructure chapter of the AI story continues to unfold.

While there are many great opportunities in the chip space, TSMC stands alone. I see it as perhaps the most unique, durable semiconductor stock to own amid a volatile technology landscape over the next several years.

The second season of Love Is Blind’s UK season came to a dramatic end today – and fan favourite couple Kieran and Megan have ‘convinced’ fans their love is still going strong

Netflix fans have been hooked on the second season of Love Is Blind UK, which came to a dramatic end today.

It was no surprise that Kieran and Megan said ‘I do’ at the altar– and although they’re sworn to secrecy on what happened after until the reunion, they’ve dropped some major hints that they’re still in love.

Megan and Kieran connected from the moment they met in the Netflix pods, although Kieran also struck up a connection with Sophie. It came crashing down pretty quickly, however, when she realised Kieran had given Megan a cute gift – whereas she was left empty-handed.

READ MORE: All the Love Is Blind couples that are still together – as Netflix drops shock UK finaleREAD MORE: Netflix fans in tears as final Love Is Blind UK series two episodes finally air

A distraught Sophie quit the process, and Megan and Kieran went on to get engaged, and later married, in today’s epic finale. It looks like their love story has continued to blossom, as they’ve dropped major clues they’re still together over on Instagram.

Fans witnessed a fairy tale wedding between the two, with Kieran breaking down in tears when he laid eyes on his bride. ” I still can’t quite believe how perfect you are for me … We’re living our fairytale right now, and Megan, you’re my happily ever after,” he said.

Although fans only witnessed the weddings today, they were actually filmed last year. The contestants have been sworn to secrecy, although some fans were left ‘fuming’ with their hints on TikTok before the wedding ceremony. ***Warning: Love Is Blind UK Season 2 spoilers ahead***

To no one’s surprise, Kieran and Megan have dropped the biggest hints yet that they’re together, as their pictures have coincidentally shared the same background more than once.

Before the finale dropped, eagle eyed fans noticed that the two had taken a trip to Frankfurt, Germany at the same time. Although they were careful not to include each other – they weren’t fooling Netflix fans.

Dropping an even more telling clue, fans noticed that the couple have the same background when posting in their houses – ‘confirming’ that they’re still married a year on from the show.

“Megan and Kieran are very married, you can see from the photos/videos that the house is the same, I love them,” wrote one fan on X, formerly known as Twitter, while another said: “I hope they are married. Because look at these photos!!! Aaahhh!”

Although fans are convinced the couple are still very much together, they’ll have to wait until Sunday, 31 August for the reunion show, where each couple’s status will be confirmed.

During the final two episodes, we also saw Kal and Sarover and Ashleigh and Billy tie the knot. However, Bardha shockingly said no to Jed at the altar – but have they kept a relationship going?

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Love Island fans may be in for a huge treat, as host Maya Jama gave away a ‘huge clue’ that a major twist may be coming to the ITV2 dating show very soon…

Love Island fans have predicted a huge twist on the way for the ITV2 dating show, as host Maya Jama gave away a ‘huge clue’ that something major is coming.

Yesterday, fans were left in shock when Alima and Ryan were brutally dumped from the villa. However, their dumping was done via text, as host Maya was nowhere to be seen.

It’s not unusual for Islanders to be dumped without Maya in the villa, but when she does rock up, Love Island fans know something huge is coming. The 30-year-old host was last seen in the sleepover villa, as she informed the Islanders that their actions had consequences.

In scenes last week, Helena chose to recouple with Giorgio, and bring him to the main villa, when Maya later informed her that it meant her current partner, Shea, had been dumped from the villa. As the Islanders returned to the main villa, Maya disappeared from screens, but from her Instagram stories – it looks like she’ll be back very soon.

On Thursday evening, the host took to her Instagram story to inform fans she was back in Mallorca, with some stunning sunset views. Seeing as she has to get back to London by Sunday to host the After Sun show, it’s safe to say she’ll be heading into the villa in the coming days, if she hasn’t already.

Should that be the case, it means the scenes will be playing out on our screens sometime soon – but what could the huge twist be?

Taking to X, formerly known as Twitter, one fan said: “Maya is going back to the villa soon as she’s back in Mallorca from what i saw on her IG.”

What she’ll be entering the villa for is currently unknown, but many predict the iconic Casa Amor will be starting soon…

“I smell Casa Amor coming very soon,” wrote one fan, while another said: “Casa Amor is soon and there’s no strong couples… There will genuinely be 30 people in that villa.”

Despite Casa Amor being a fan favourite segment in the show, this year, fans don’t think it will bring the same level of drama. In previous years, the new villa has been known to break up some of the strongest couples.

Fans now predict that due to there not being many solid couples in the villa, more Islanders than ever before will chose to couple up.

This series promises more twists and turns than ever, so is Maya heading into the villa for Casa Amor? Or could it be something else?

Love Island 2025 airs every night at 9PM on ITV2 and ITVX.

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