Tech giants' earnings beat expectations, pushing US stocks to record highs; Nasdaq leads global markets

On July 27, 2026, all three major US stock indexes rose, with the S&P 500 and Nasdaq both hitting new all-time highs. The Dow Jones Industrial Average rose 0.8%, the S&P 500 gained 1.2%, and the Nasdaq surged 1.8%. The main driver was the better-than-expected quarterly earnings reports from tech giants Apple, Amazon, and Alphabet (Google parent) just released.

Tech Giants' Earnings Beat Expectations Across the Board

Apple Inc. (AAPL) reported fiscal third-quarter revenue of $91 billion, up 6.5% year-over-year, with net income of $23 billion, both beating Wall Street expectations. Particularly impressive was its services business (App Store, Apple Music, iCloud, etc.), which grew 12% to reach a record high of $23 billion. Although iPhone sales revenue grew only 3%, strong penetration in emerging markets boosted Greater China sales by 8%. CEO Tim Cook said on the conference call that AI features integrated into iOS 20 could drive a new upgrade cycle.

Amazon (AMZN) posted second-quarter revenue of $148 billion, up 9% year-over-year, with AWS cloud computing revenue growing 18% to $25 billion, reversing the slowdown of the past four quarters. Amazon also announced earnings per share of $1.20, well above the expected $0.95. Additionally, sales during Prime Day surged 15% year-over-year, showing consumer spending resilience.

Alphabet (GOOGL) reported second-quarter revenue of $83 billion, up 7% year-over-year, mainly due to a recovery in search advertising (+8%) and YouTube ad growth of 10%. Google Cloud achieved its first quarterly profit of $350 million. CEO Sundar Pichai emphasized that AI-driven search and cloud services will be the core of future growth.

Market Reactions and Industry Interpretation

After the earnings releases, Apple rose over 3% in after-hours trading, Amazon gained 2.5%, and Alphabet added 2%. The tech sector overall strengthened, with Nvidia (NVDA) up 4%, AMD up 3.5%, and Microsoft (MSFT) slightly higher. Analysts believe the strong results prove AI investments are translating into real revenue, easing recession fears.

On the macro front, the US Commerce Department reported on July 26 that the second-quarter GDP annualized growth rate was 2.8%, above the expected 2.0%, but core PCE price index rose only 0.1% month-over-month and 2.4% year-over-year, below expectations. The labor market remained strong, with initial jobless claims staying low. Federal Reserve Chair Jerome Powell recently hinted at a possible 25-basis-point rate cut in September if inflation remains moderate. This expectation provides a more accommodative liquidity environment for tech stocks.

Outlook and Investment Strategy

As earnings season enters its second half, investors should watch next week's Fed interest rate decision and July nonfarm payrolls. Market probability of a September rate cut has risen above 70%. However, some tech stocks are trading at historically high valuations, with the S&P 500's forward 12-month P/E ratio around 22x, well above the historical average. Investors are advised to focus on the following opportunities:

• Cloud Computing and AI Infrastructure: Growth at Amazon AWS, Microsoft Azure, and Google Cloud shows the cloud capex cycle is ongoing, benefiting related chips (Nvidia, AMD) and data center operators.
• Apple Services Ecosystem: Apple's high-margin, growing services business provides a safe haven, combined with AI upgrade expectations; consider buying on dips.
• Advertising and Consumer Recovery: Recovery in Google and Amazon ad revenue indicates stronger corporate spending, while retail consumption remains resilient.

On the risk side, watch for geopolitical tensions (e.g., US-China tech friction) and policy uncertainty from the US election. But overall, the solid fundamentals of tech giants support US stocks, and the Nasdaq is likely to continue leading global markets during the rate-cut cycle.

As of press time, in after-hours futures trading, Apple was up 2.1%, Amazon up 1.8%, and Alphabet up 1.5%. Market sentiment is positive, and tomorrow's open may extend gains.