META and others have been streamlining. For example, META had its ‘year of efficiency’ and cut headcount significantly. Amazon has also focused on cutting layers of management. Reduced expenses + growth = skyrocketing free cash flow.
No fraud here. These companies make upfront investments (capex) that drive free cash flow growth later. Think of it like building a factory now and reaping benefits for years.
Tech companies are harder to value with discounted free cash flow (DCF) because growth is unpredictable, and a lot of cash gets spent on R&D and soft costs. These aren’t fraud—it’s just the nature of the sector.
It’s not fraud; tech just had a good year. For instance, Meta benefited from strong ad revenue and lower capex. Amazon’s AWS and AI integrations drove growth, while Netflix saw price hikes and strong subscriber growth.
These profits partially come from leveraging their ad/subscription models. Inflation also plays a role, as costs get passed down the line to consumers.