Remember when everyone was doom-scrolling about tech stocks being “overvalued” and the AI bubble bursting? Yeah, well, Amazon just told that narrative to hold its beer.
The e-commerce giant absolutely crushed earnings yesterday, sending its stock rocketing 13% in what can only be described as a “told you so” moment for anyone who didn’t panic-sell during the recent tech wobbles.
So what actually happened?
Amazon didn’t just beat expectations – it obliterated them. Their cloud business (AWS) is printing money faster than a government stimulus program, and here’s the kicker: they’re not slowing down. They actually raised their guidance, which in corporate speak translates to “we’re going to make even more money than we thought.”
But here’s where it gets interesting. This isn’t just about Amazon having a good quarter. The whole tech ecosystem is suddenly looking less like a house of cards and more like, well, a money-printing machine.
Apple climbed 2% after solid iPhone sales (shocking, I know – people still buy iPhones). Netflix announced a 10-for-1 stock split because apparently their shares got too expensive for regular humans. Even NVIDIA jumped 2% on news of some multi-billion-dollar AI partnership that sounds like it came straight out of a sci-fi movie.
The bigger picture? AI spending is absolutely bonkers right now.
Companies aren’t just talking about AI anymore – they’re throwing money at it like it’s going out of style. And here’s the thing: it’s actually working. The numbers don’t lie. Q3 earnings growth just jumped from 7% to 10.6% in a matter of weeks. That’s not a typo.
What we’re seeing is the classic “fear of missing out” starting to kick in. You know that feeling when you see your friend’s crypto portfolio from 2017? Yeah, that’s happening with AI stocks right now.
The market just survived what I like to call the “Magnificent 7 gauntlet” – basically, all the big tech companies had to prove they weren’t just hype. Spoiler alert: most of them passed with flying colors.
Here’s what this means for your portfolio:
We’re heading into the strongest part of the year for stocks (yes, seasonality is actually a thing, and no, it’s not just astrology for finance bros). Combine that with companies literally raising their spending forecasts for AI, and you’ve got a recipe for what traders call “melt-up” conditions.
The second-tier growth stocks are starting to catch fire too. Think of it like this: when the big kids at the AI lunch table start making money, everyone wants to sit with them.
Bottom line: Yesterday’s tech selloff is looking more like a head fake than a real trend change. Amazon’s 13% pop isn’t just about one company having a good day – it’s confirmation that the AI-driven earnings cycle is alive, well, and just getting started.
Sometimes the market really is that simple: companies make more money, stocks go up. Who would’ve thought?