Amazon shares recorded their biggest one-day gain since April 2012, surging 15% on Friday after the company reported that cloud revenue accelerated at the fastest pace in more than four years. The results, which added more than $340bn in market value, provided the clearest signal yet that some of Big Tech’s massive artificial-intelligence investments are generating measurable returns, calming a market that had grown anxious about the scale of spending.

The e-commerce and cloud giant said Amazon Web Services revenue jumped 37% to $42.2bn in the quarter, the fifth consecutive period of accelerating growth and the strongest since the fourth quarter of 2021. Chief Executive Andy Jassy told investors that the company is only pouring money into serving demand that already exists, noting that a majority of available cloud capacity for 2027 and some for 2028 had already been reserved by customers. Amazon raised its planned capital expenditure for 2026 to $220bn, a 10% increase from an earlier estimate, even as free cash flow swung to a negative $7.6bn on a trailing 12-month basis.

The rally marked a sharp divergence from the treatment meted out to other tech giants. Microsoft, which earlier in the week forecast stronger-than-expected cloud growth, surged more than 15% on Thursday. But Meta and Alphabet both slumped 7% after raising their own spending forecasts while free cash flows deteriorated, and Apple tumbled 7.4% after issuing a disappointing sales outlook. “The market is no longer questioning whether AI demand is real. The new dividing line is whether unprecedented spending is producing visible, near-term revenue and margin expansion,” said Bill Birmingham, managing director at REX Financial. Thomas Monteiro, senior analyst at Investing.com, added: “Amazon is earning the right to keep spending. Where others are asking investors to trust that the payoff will come, Amazon showed it this quarter.”

The S&P 500 closed 0.7% higher at 7,489.72, while the Nasdaq gained 1% to 25,373.85. For the month of July, however, the Nasdaq fell 3.2%, reflecting the earlier rotation out of AI-related stocks. Attention now turns to the Federal Reserve’s September meeting, where markets are pricing a 65% chance of a rate hike after three policymakers dissented this week in favour of immediate tightening to bring inflation down to the 2% target.