Mega-Cap Tech Earnings Reignite AI Trade

Amazon Q2 beat with AWS 37% YoY, stock +14%; Microsoft and Apple also reported. AI capex translating to revenue, but Apple's cautious guidance contrasts. Amazon's deep-dive shows $220B CapEx with expanding AWS margins and negative free cash flow, but long-term contracts back the spend. The NASDAQ rallied on this single earnings report while the Dow lagged, reinforcing narrow breadth. Rotation within tech as hyperscaler capex story strengthens. Overall S&P 500 earnings growth hit 47.4% in Q2, best since 2021, confirming the earnings-driven rally; forward P/E below 5-year average suggests value.