Asian stocks add $1 trillion as AI earnings fuel rebound

Asian equities added roughly $1 trillion in market value Thursday, one of the strongest rebounds on record, after Microsoft and Amazon delivered blockbuster AI-driven earnings.

"AWS is booming," Andy Jassy, chief executive officer at Amazon, said in a statement, citing AI and chip businesses each eclipsing run rates above $25 billion.

Microsoft's stock jumped 9.8 percent after the software giant reported revenue up 18 percent to $90 billion for the quarter ended June, with Azure growth of 43 percent crossing $100 billion in annual revenue. Amazon shares rose more than 7 percent in after-hours trading as AWS sales climbed 37 percent, the fastest pace in 18 quarters. The results contrasted with Meta Platforms, which fell 10 percent after reporting earnings per share of $6.18, $1.02 below consensus, and free cash flow down 81 percent to $784 million.

The divergence shows what investors are paying for: Microsoft and Amazon monetize AI infrastructure through external cloud customers, while Meta consumes its own capacity with no offsetting revenue. Alphabet added to the AI spending picture by raising its full-year capital expenditure forecast to $195 billion to $205 billion, even as its cloud business grew 82 percent.

The Asian rebound tracked Wall Street's overnight session, where the AI earnings wave lifted technology shares across the region. Semiconductor supply chain names and cloud infrastructure providers led the advance, with traders pointing to the $678 billion backlog at Microsoft — up 84 percent year over year — as evidence that AI demand has contracted customers behind it.

Microsoft's guidance reinforced the bull case. Chief Financial Officer Amy Hood guided fiscal first-quarter revenue to a midpoint of $90.4 billion, $740 million above the Street estimate, while targeting Azure growth of 45 percent, four percentage points faster than consensus. The company also lowered its 2026 capital expenditures 8 percent to $175 billion by changing accounting assumptions, while keeping quarterly capex above $50 billion.

Amazon's results showed similar momentum. The company reported net income of $62.65 billion, or $5.75 per share, compared with $18.16 billion a year earlier, as net sales rose to $200.6 billion from $167.7 billion. Jassy noted record delivery speeds for Prime members in the first half of the year, with 40 percent more items delivered same-day or overnight.

Meta's Miss Highlights AI Monetization Divide

Meta's stumble provided the counterpoint. Operating margin declined 12 percentage points to 31 percent, and the company cut its 2026 capex forecast 10 percent to $145 billion while declining to quantify 2027 spending. CFO Susan Li's refusal to provide forward capex guidance drew scrutiny from analysts, with JPMorgan's Douglas Anmuth pressing management on the contradiction of Meta becoming both buyer and seller of AI computing.

The question now is whether the AI earnings momentum can sustain the Asian rally — and whether risk appetite extends to Bitcoin. Microsoft's stock trades 29 percent below its 52-week high at 23 times trailing earnings, with analysts estimating 42 percent upside based on consensus 12-month price targets. Meta's estimated upside is 35 percent. For Asian markets, the key test will be whether semiconductor and AI supply chain names can maintain their advance into the next earnings cycle.

This article is for informational purposes only and does not constitute investment advice.