In their short history, Alphabet (the parent company of Google), Microsoft, and Meta (the parent company of Facebook) have faced many challenging environments. But they always survived and thrived, delivering superior financial and market returns.

Last week, all three companies reported solid financial results for the previous fiscal quarter amid a complex macroeconomic environment of elevated inflation, a slowing economy, and several legal challenges to their market dominance.

For instance, Meta's revenues grew at an annual rate of 3% in the first quarter, while its management offered an upbeat guidance for the next quarter.

"This comes after a series of negative growth quarters and increased investor scrutiny in the company's Metaverse business," Tejas Dessai, Research Analyst at Global X, told International Business Times. "Management deserves points for balancing cost-cutting and long-term strategic planning."

Wall Street liked what it saw in these financial results, sending Meta's stock up more than 10% the day after its financial results were released.

One of the critical drivers behind the repeated comeback of the U.S high-tech sector is the flexibility of the nation's labor markets. It allows management to adjust employment to changing market conditions: hiring more people in good times and letting some people go in bad times.

During the pandemic, for instance, these tech giants hired more people as demand for their products and services increased, but they were quick to lay off people in recent months as demand tapered off. Thus, a decline in labor costs helped these companies maintain a healthy bottom line and free cash flow that benefited stockholders.

That differs for their peers from Japan to China and Europe, where labor market regulations and ideology make it extremely difficult to lay off people. As a result, companies need more flexibility in cutting labor costs in hard times, which hurts stockholders.

Another critical driver behind the superior performance of U.S tech giants is multiple competitive advantages -- "moats," to use Warren Buffett's language -- which keeps competition off their home turf. In addition, it allows these giants to charge premium prices for their products and services, meaning higher profits for stockholders.

One of these "moats," for example, is the economies of networking, the benefits associated with an extensive network of users. The larger the network, the larger the benefits to each user.

Then there are product bundling and "lock-in" relations, which support and reinforce the economies of network advantage. And there's innovation, the churning of new products and services that address the needs of an ever-changing market.

"Some of the world's biggest and most powerful technology companies are Alphabet, Microsoft, and Meta," Leo Ye, CEO and Co-founder of Cubo, told IBT. "Due to its search engine and affiliates like YouTube and Google Maps, Alphabet, the parent company of Google, has a significant competitive advantage.

"Microsoft has an advantage thanks to its widely used Office Suite, Windows operating system, and Azure, its cloud computing platform," Ye continued. "With its AR technology, which has the potential to completely change how people engage with digital material, Meta, a business that specializes in augmented reality, has a distinct competitive advantage in the market."

Dessai provides further insight into Meta's competitive advantage. "Meta's strong engagement numbers, with DAUs up across the family of apps, indicate the continued popularity of social media channels, despite a return to normalcy headwinds," he said. "Legacy channels like TV, newspaper, and more have plenty of ground to give still."

In addition, Meta has been using AI to overcome targeting problems it encountered after Apple tightened data-sharing policies. "Growing ad impressions and dropping costs of ads also indicates the success of newer formats like Reels, which have grown in popularity despite tough competition from TikTok and Shorts," added Dessai.

"Overall, Meta is ahead of the game anticipating the demand for interactive two-way communication between brand and customer," observed Zarnaz Arlia, CMO at Emplifi, told IBT." Furthermore, monetizing paid messaging apps will open another revenue stream for Meta, allowing their profits to be diversified and less dependent on in-feed advertising.

Still, Matthew Tuttle, Chief Executive Officer & Chief Investment Officer at Tuttle Capital Management, is skeptical of the recent rally in the big-cap tech company shares.

"I think we are seeing flows into the mega-cap tech names as a flight to safety and also a bubble forming in AI," he told IBT. "I do not think this is sustainable, and I would not be chasing these stock prices up. It is also important to note that while companies like this are beating in their earnings reports, they are exceeding numbers that have already been taken down."

Editor's note: The author owns shares of Microsoft, Meta, and Alphabet.