Amazon reaches $3 trillion market cap milestone while Meta rallies 7% as AI hyperscalers post strong earnings results.
Mega-cap AI names surged in Monday midday trading as strong hyperscaler earnings and an easing geopolitical backdrop lifted the entire cohort. Microsoft shares gained 5% to $488.16, while Amazon shares climbed 5% to $283.89, pushing Amazon's market capitalization past $3 trillion. Meta Platforms led the group, up 7% to $593.15, and Alphabet gained 5% to $374.40. Oracle rallied 8% to $139.80, and the Invesco QQQ Trust rose 1.67% to $699.45.
The catalyst for Microsoft, Amazon, Meta, Alphabet and Oracle was a mix of last week's blowout hyperscaler earnings and a risk-on market mood after President Trump called off strikes on Iran. Traders treated Monday's session as an earnings-relief rally, with breathing room returning to a cohort that spent much of July fielding AI capex questions.
Microsoft's Q4 FY2026 report set the tone. Azure revenue grew 43% year over year, and the segment topped $100 billion in annual sales for the first time. CEO Satya Nadella stated, "This year, Azure revenue surpassed $100 billion for the first time, and Microsoft 365 Copilot reached over 30 million paid seats, reflecting the confidence customers are placing in us to power their AI transformation."
Amazon followed with AWS revenue up 37% to $42.2 billion, its fastest pace in 18 quarters. CEO Andy Jassy noted that the company's AI and chip businesses each now run at about a $25 billion annual revenue run rate. Consolidated Q2 2026 revenue reached $200.6 billion, and operating income climbed 43.2% year over year.
Meta shares recovered the 9% drop that followed the company's mixed Q2 print. The report missed on earnings per share at $6.18 against $7.2173 expected, weighed by $2.4 billion in legal charges and $1.18 billion in severance. Advertising revenue still climbed 27% to $59.4 billion, and CEO Mark Zuckerberg stated, "AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities."
Google Cloud revenue accelerated 82% to $24.8 billion in Q2 2026, and Alphabet raised full-year capex guidance to $195 billion to $205 billion from $180 billion to $190 billion. Alphabet stock recovered its post-earnings drop and now sits up 20% year to date.
Oracle's move was more muted. Oracle stock remains down 28% year to date, weighed by AI-spending concerns and heavy reliance on OpenAI, a private company with which Oracle signed a large multi-year cloud-infrastructure deal. The company's Q4 FY2026 Cloud Infrastructure revenue jumped 93% to $5.8 billion, and remaining performance obligations surged to $638 billion.
The QQQ ETF captured the group-wide bid but tempered it. The fund holds every hyperscaler in Monday's rally, but the comparatively modest 1.67% move reflected the diversification of the NASDAQ 100 relative to the concentrated mega-cap tape. Mega-cap concentration still dominates the fund, and the small spread between the ETF and its top 10 holdings underscored how much of the rally sat in a handful of names.
Retail sentiment shifted quickly with the numbers. Microsoft sentiment on Reddit hit 94 (very bullish) on July 31, and Amazon peaked at 82 on August 2 in aggregate readings across major stock subreddits. Prediction markets echoed the tone, with Polymarket assigning a 99.4% probability that Microsoft closes higher and a 93.1% probability for Amazon closing higher.
The bull case for these names rests on cloud growth compounding at current rates and the remaining performance obligations backlog converting to revenue. The bear case rests on free cash flow compression as capex intensity builds. Oracle's next update and further capex color from Microsoft and Alphabet may shape the summer setup. Given valuations already reflect much of the positive sentiment, a moderate position size and balanced exposure across the group remained prudent rather than chasing any single name into the print.