The tech heavyweight’s strong quarterly report bolsters investor confidence
Yvonne Poh YS
[BENGALURU] Wall Street ended higher on Friday (Jul 31), lifted by Amazon as the tech heavyweight’s strong quarterly report bolstered investor confidence in artificial intelligence-related stocks, while Apple dropped after its results disappointed investors.
Amazon.com surged over 15 per cent after posting its biggest quarterly revenue growth in over four years. Its results, along with a similar report from Microsoft on Wednesday, alleviated investor concerns about potential overspending on AI data centres.
Worries that heavy investments in AI infrastructure may be taking too long to pay off rattled global markets this month and led to doubts about companies at the centre of Wall Street’s rally in recent years.
“There were worries that Amazon’s spending was just moonshot spending, that it’s irresponsible spending, and (CEO) Andy Jassy just put those fears to bed,” said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma.
The PHLX chip index edged up 0.1 per cent, and it remains down over 20 per cent from its Jun 22 record high close. Apple tumbled 7.4 per cent after warning that supply constraints would hurt growth, adding to worries that recent iPhone price hikes would weaken consumer demand.
Apple’s slump kept the S&P 500 technology index down 0.5 per cent, despite gains in other tech stocks. Microsoft rose 3 per cent, adding to gains after surging over 15 per cent on Thursday in its biggest one-day percentage gain since 2008 after it forecast stronger-than-expected cloud growth. Monolithic Power Systems rose over 8 per cent after forecasting third-quarter revenue above estimates.
The S&P 500 climbed 0.7 per cent to end the session at 7,489.72 points. Even as the S&P 500 rose, declining stocks outnumbered rising ones by a 1.3-to-one ratio.
The Nasdaq gained 1 per cent to 25,373.85 points, while the Dow Jones Industrial Average rose 0.5 per cent to 52,485.03 points.
Volume on US exchanges was heavy, with 20.6 billion shares traded, compared with an average of 17.1 billion shares over the previous 20 sessions.
For the week, the S&P 500 rose 1.1 per cent and the Nasdaq added 1.6 per cent. The S&P 500 ended July about flat from June, while the Nasdaq fell 3.2 per cent. Both indices are up about 9 per cent in 2026.
Analysts on average expect S&P 500 aggregate second-quarter earnings to soar 48 per cent from a year ago, with AI-related stocks accounting for much of that growth, according to LSEG I/B/E/S.
Strong earnings forecasts and a recent decline in share prices have left the S&P 500 trading at about 20 times expected earnings, just above its 10-year average of 19 times, according to LSEG data. REUTERS
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