July 30, 2025 – U.S. Earnings Supercharge AI Stocks
Microsoft & Meta Ignite Half-Trillion Rally: After the market close on Wednesday, blockbuster earnings from Microsoft and Meta Platforms sent shockwaves through AI-focused stocks. In extended trading, Microsoft jumped 8% and Meta surged 9%, together adding nearly $440 billion to their market caps reuters.com. These “Magnificent Seven” giants have poured billions into AI, and investors finally saw payoff. Microsoft reported Azure cloud revenue up 39%, topping estimates of ~35%, and revealed its AI-powered Copilot tools now exceed 100 million monthly users reuters.com reuters.com. CFO Amy Hood told analysts the record tech spending was backed by concrete demand: “I feel very good that the spend that we’re making is correlated to basically contracted, on-the-books business that we need to deliver” reuters.com. Meta likewise blew past expectations, forecasting Q3 revenue well above consensus as AI-driven ad tools boosted engagement reuters.com. CEO Mark Zuckerberg said on the call that recent advances suggest faster progress toward “really strong AI or superintelligence”, noting “the more aggressive assumptions… have most accurately predicted what would happen” reuters.com. He vowed, “We’re just going to push very aggressively on all of that” in Meta’s AI strategy reuters.com. Wall Street cheered that ambition – Meta’s stock soared 11% after hours reuters.com. An eMarketer analyst summed it up: “AI-driven investments into Meta’s advertising business continue to pay off… But Meta’s exorbitant spending on its AI visions will continue to draw questions” about returns reuters.com. The late-day euphoria even lifted other names: AI-chip leader Nvidia, already the world’s most valuable company, ticked up 1%, and Amazon (reporting Thursday) climbed over 2% in sympathy reuters.com. In total, Wall Street’s AI heavyweights gained about $500 billion in value on the day, a resounding market vote of confidence in Big Tech’s AI bets reuters.com reuters.com.
Cybersecurity Mega-Deal Targets AI Threats: In M&A news, Palo Alto Networks announced a $25 billion agreement to acquire Israel’s CyberArk Software, aiming to combat a new era of AI-driven cyber threats reuters.com. This cash-and-stock takeover – among the year’s largest tech deals – will expand Palo Alto’s portfolio into identity security, critical as “the rise of AI and the explosion of machine identities have made it clear that every identity requires the right level of privilege controls,” said CEO Nikesh Arora reuters.com. The deal follows Alphabet’s $32B purchase of cloud security firm Wiz in March, signaling rapid consolidation as companies seek comprehensive defenses amid surging breaches reuters.com. Palo Alto shares fell 8% on investor worries about digesting such a large target (it’s used to sub-$1B tuck-ins). “It’s a bit of unknown territory for Palo Alto,” noted Roth MKM analyst Imtiaz Koujalgi, given integration challenges with a big installed base reuters.com. Still, analysts say the move could accelerate Palo Alto’s AI-security push by cross-selling CyberArk’s tools – seen as “vital for securing AI systems” – via Palo Alto’s global sales force reuters.com. CyberArk shareholders will get a hefty 29% premium, and the deal is expected to close by fiscal 2026 H2 reuters.com reuters.com. With global cybersecurity spending set to jump 12% this year amid AI-fueled threats reuters.com, Palo Alto is betting big that an end-to-end platform will win over AI-wary enterprise customers.
Regulators Eye AI Giants: European regulators made headlines Wednesday, underscoring the policy risks around AI. Italy’s antitrust authority (AGCM) opened an investigation into Meta, alleging abuse of dominance by bundling its new “Meta AI” chatbot with WhatsApp without user consent reuters.com. The watchdog warned this integration could unfairly “steer users” toward Meta’s AI services and squeeze out rivals reuters.com reuters.com. Meta says it’s cooperating and noted its AI assistant – live in WhatsApp since March – simply offers Italians a free, optional tool in a familiar app reuters.com reuters.com. If found guilty of anti-competitive conduct, Meta faces fines up to 10% of global turnover reuters.com. Meanwhile in Brussels, Alphabet’s Google agreed to sign the EU’s new AI Code of Practice, a voluntary guide to comply with upcoming AI Act rules reuters.com. Google’s global affairs chief Kent Walker said the company supports the code to ensure Europeans have “access to secure, first-rate AI tools”, but he cautioned that overzealous EU rules could “slow [AI] approvals” and expose trade secrets, “harming Europe’s competitiveness” reuters.com. Notably, Microsoft signaled it will also sign the code, while Meta refused, citing legal uncertainties for model developers reuters.com. These moves come as the EU races to set a global benchmark for AI regulation, forcing U.S. tech leaders to balance compliance with innovation reuters.com. The day’s events show that even as markets reward AI progress, government scrutiny – from competition probes to transparency rules – is intensifying around Big Tech’s AI endeavors.
July 31, 2025 – Global Markets Ride the AI Wave
Stocks Extend Gains, Apple & Amazon in Focus: The bullish momentum continued into Thursday as investors digested more earnings and looked ahead to Apple and Amazon results. U.S. stock futures jumped early in the day – Nasdaq futures up about 1.3% pre-market – thanks to the overnight tech blowout reuters.com. “It has been a great earnings season so far, and that’s the primary reason why U.S. stocks continue to do well,” observed David Chao of Invesco, though he noted macro risks like tariffs still loom reuters.com. Amazon’s stock rose in advance of its report, buoyed by optimism around its cloud and AI initiatives. In fact, Bank of America analysts just hiked their Amazon price target to $265, citing a likely Q2 revenue beat (they projected $164B vs $162B consensus) and “stronger AI-related demand and backlog momentum” in AWS cloud services investing.com investing.com. They see Amazon’s AI investments and recent cost cuts (even some AWS job trims) boosting margins later this year investing.com. Apple shares also traded near all-time highs ahead of earnings, but some on Wall Street are voicing concern that Apple lags in generative AI. Needham analyst Laura Martin warned Apple “can’t remain on the sidelines” without a clear AI strategy – calling it an “existential risk” as Google and Amazon monetize AI cloud services investing.com investing.com. She even speculated Apple might spend billions on an Anthropic partnership or ramp its own AI spending to catch up investing.com. Despite such concerns, many investors remain confident Apple will address AI more forcefully; the stock is down 14% year-to-date, underperforming peers, which some attribute to this AI narrative investing.com. All eyes will be on CEO Tim Cook to see if he emphasizes AI on the earnings call. With these two tech titans reporting after the bell, Thursday’s regular session saw relatively muted moves as traders took a breather – the Nasdaq Composite held near its 2025 highs, and the S&P 500 was little changed by mid-day as gains in chipmakers offset profit-taking elsewhere (Nvidia and AMD ticked up ahead of their own results next month). In credit markets, the AI hype even spilled over: investors noted tight spreads on tech company bonds, reflecting the upbeat sentiment around the sector’s cash flows as AI products roll out.
Asia’s Mixed Reaction – China Showcases AI Ambitions: Asian markets digested the U.S. tech news with a bit of caution. MSCI’s broad Asia-Pacific index edged lower, weighed down by Hong Kong, where the Hang Seng dropped ~1% on weak China economic data reuters.com. But Chinese tech stocks were a bright spot amid the regional doldrums. In Hong Kong trading, Baidu shares jumped over 3% to a multi-month high as investors applauded the company’s latest AI initiatives. At the big WAIC 2025 tech conference in Shanghai this week, Baidu introduced its new AI assistant “Xinxiang” for smartphones, which can analyze information and plan travel more efficiently than standard chatbots reuters.com. That launch, alongside demonstrations of Baidu’s open-sourced Ernie AI model and other “AI agent” products, underscored China’s determination to lead in AI. Rival Alibaba also impressed attendees by showcasing its Qwen 3 large model (now with 400+ million global downloads) and a suite of AI-powered applications minichart.com.sg minichart.com.sg. Chinese tech giants’ progress on generative AI – and supportive signals from Beijing – have improved market sentiment since mid-year. Traders noted that Tencent, Kuaishou, and Alibaba all saw stock gains this week as they unveiled new AI tools and partnerships at WAIC minichart.com.sg minichart.com.sg. However, broader Asian indexes remain sensitive to economic headwinds. In Japan, the Nikkei was flat on Thursday – upbeat outlooks from factory automation firms (on AI-related orders) were offset by caution ahead of a Bank of Japan policy update. South Korea’s KOSPI slipped ~0.5% even as chipmaker SK Hynix rallied on hopes of memory demand from AI servers. Overall, Asia’s tech sector is taking cues from the U.S. rally, but local factors (like China’s PMI miss) tempered the exuberance reuters.com. Still, the thematic trend is clear: from Silicon Valley to Shenzhen, companies tied to AI development – be it in software, chips, or data infrastructure – are emerging as market leaders in 2025’s second half.
Europe’s AI Beneficiaries and Outlook: European markets also joined the party, with the pan-European STOXX 600 ticking up on Thursday. In particular, Europe’s industrial and tech-adjacent firms signaled strength thanks to AI and data-center demand. Schneider Electric – a French company that supplies data-center electrical gear – reported robust Q2 sales and confirmed its 2025 outlook, citing “continued strong demand” for data-center solutions reuters.com reuters.com. Schneider’s data-center related sales jumped double-digits last quarter, and it noted booming interest in new cooling systems (like liquid cooling via a recent U.S. acquisition) to support high-density AI servers reuters.com reuters.com. Its stock climbed over 3% in Paris as investors see it as a picks-and-shovels winner of the AI era. Similarly, rival French firm Legrand (which makes data-center power and network equipment) raised its profit margin outlook after seeing an AI-fueled surge in orders – news that sent Legrand shares up 5% aol.com. Meanwhile, UK-based chip designer Arm Holdings – recently relisted and a bellwether for Europe’s tech scene – delivered a mixed message. Arm’s stock tumbled 8% overnight after it guided lower-than-hoped profits for next quarter, partly because it plans to reinvest heavily in developing its own chips (a strategy shift from pure IP licensing) reuters.com reuters.com. CEO Rene Haas confirmed Arm is exploring building “chiplets” and complete semiconductor solutions in-house to capitalize on AI and cloud opportunities reuters.com reuters.com. While this long-term move could open new revenue streams, it will raise costs now – “advanced AI chips cost upwards of $500 million” each to design and produce, Haas noted reuters.com. Some analysts worry Arm’s rich valuation (up ~150% since its 2023 IPO) already bakes in huge AI success, leaving little room for error. “Results and outlook were light… below expectations,” said Summit Insights’ Kinngai Chan, though he acknowledged Arm’s central role in smartphone chips and growing “cloud-server and AI accelerator design wins” that keep its royalty business “humming” reuters.com reuters.com. Across Europe, the broader takeaway is optimistic: from chip IP to industrial hardware, the AI revolution is lifting many boats. Policymakers in Brussels, for their part, continue pushing an EU AI Act that could become law by year-end – but so far, the market perceives regulation as a manageable risk for incumbents. As July closes, global investors are rotating into any names with an AI angle, and Europe is no exception. As one London trader quipped, “AI is the new oil, and everyone wants a piece of the gushers.”
Strategic Partnerships & Global Expansion: In tandem with earnings, partnerships in the AI space are proliferating. Nvidia, flush from its dominance in AI chips, is expanding its reach via alliances. This week Nvidia unveiled a $700 million collaboration with Africa’s Cassava Technologies to roll out GPU-packed AI data centers across Nigeria, Egypt, Kenya, South Africa, and Morocco datacentremagazine.com datacentremagazine.com. It’s Nvidia’s first major infrastructure investment in Africa, aimed at narrowing the continent’s “compute deficit” by delivering cutting-edge GPUs to local tech firms and researchers. “Few companies come close to the dominance of Nvidia in the AI sector… bringing [its chips] to the continent will assist in closing the computing gap,” said New Lines Institute analyst Eric Omorogieva datacentremagazine.com datacentremagazine.com. The first batch of 3,000 Nvidia GPUs has already been delivered to a new South African data center in June, with 12,000 more GPUs slated for deployment across Africa in coming years datacentremagazine.com datacentremagazine.com. Likewise in Asia, Nvidia’s ecosystem is growing: Taiwan’s Foxconn (a key Nvidia manufacturing partner) just teamed up with local tech firm Teco to develop AI platforms for smart manufacturing news.bloomberglaw.com. And in the automotive realm, Microsoft announced an expanded partnership with onsemi to enhance AI-ready 800V silicon carbide chips for EV data centers finance.yahoo.com. These deals underscore how legacy and emerging companies worldwide are joining forces to seize AI opportunities – whether in cloud computing, autonomous driving, or edge devices. Mergers, acquisitions, and joint ventures in the AI sector have already topped $60+ billion this year globally, and analysts anticipate this trend will accelerate as firms race to acquire talent and technology.
In summary, the last two days of July showcased a crescendo of AI-related market action: blowout U.S. tech earnings affirming that massive AI investments are starting to pay off, major deals and partnerships reshaping the competitive landscape, and a global ripple effect lifting stocks from Silicon Valley to Shenzhen. As one portfolio manager put it after Microsoft’s and Meta’s reports, “The bar was set really high… They delivered” reuters.com. That sentiment – that AI hype is translating into tangible growth – is driving both optimism and urgency across global markets. Going into August, traders will be watching whether this AI momentum can be sustained, or if, as skeptics warn, rising expenses and regulatory headwinds will eventually test the resilience of the “AI rally” of 2025.
Sources: Microsoft & Meta earnings reuters.com reuters.com; Microsoft analyst quotes reuters.com reuters.com; Zuckerberg & Meta call reuters.com reuters.com; M&A – Palo Alto/CyberArk reuters.com reuters.com; Italy AGCM on Meta reuters.com; EU AI code – Google/Walker reuters.com; Nasdaq futures/analyst comment reuters.com; BofA on Amazon AWS investing.com; Needham on Apple AI risk investing.com investing.com; WAIC China tech highlights minichart.com.sg minichart.com.sg; Schneider Electric results reuters.com; Arm outlook drop reuters.com reuters.com; Nvidia–Cassava partnership datacentremagazine.com datacentremagazine.com.
