US stocks end April at record highs as Big Tech results spotlight AI spending
US stocks closed April at record highs, with the S&P 500 notching a fresh milestone as a wave of Big Tech results put artificial intelligence investments front and center for investors. In the final week of the month, Alphabet, Amazon, Meta and Microsoft — four of the “Magnificent Seven” stocks that have propelled market gains in recent years — reported earnings showing collective earnings growth of 60 percent.
Share moves were mixed. Meta fell 9 percent on Thursday despite first-quarter earnings meeting estimates and revenue rising more than 33 percent year over year. Joe Mazzola, head trading and derivatives strategist at Charles Schwab, said investors appeared focused on Meta’s higher full-year capital expenditure guidance, which raised concerns over spending.
Alphabet surged 8 percent on Thursday after reporting earnings of $5.11 (£3.75) per share, Amazon gained nearly 3 percent, and Microsoft slipped 2 percent. “Big tech results gave investors plenty to chew over, but the broad message was hard to miss as AI moves from promise to profit engine,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
He noted strong growth across the group, accelerating cloud demand and continued build-out plans, while cautioning that markets remain divided on hefty spending. Paul Dalton, investment director for equities at Federated Hermes, said megacap earnings “reinforced a familiar headline” of strong revenue growth and rising demand for agentic AI, adding that fundamentals are gaining importance.
“It is no longer sufficient simply to have exposure to the AI theme; capital discipline and valuation are under greater investor scrutiny, with an increasing focus on execution, returns and margin sustainability,” he said.
The broader earnings season is on track to deliver one of the strongest year-over-year earnings-per-share growth readings in recent years, according to Wolf von Rotberg, equities strategist at J Safra Sarasin Sustainable Asset Management. With 51 percent of S&P 500 companies having reported first-quarter results, blended EPS growth (actual and consensus) is tracking at 19.3 percent, which he said would be the strongest since early 2022.
Michael Hewson, senior market analyst at iForex, noted that the market’s record highs have come despite oil prices reaching their highest levels since 2022. He said increased AI spending by major US tech firms is helping drive valuations higher and contributing to a first-quarter rebound in the US economy, which showed 2 percent annualized growth in data released last week.
Hewson added that Alphabet, Amazon, Meta and Microsoft are collectively looking to spend almost $700 billion (£514 billion) in capital expenditure to build out AI infrastructure, helping US equities outperform European markets. Richard Flax, chief investment officer at Moneyfarm, said strong earnings growth has underpinned April’s equity recovery, led by technology.
He added that those earnings drivers could be at least partly insulated from the macro impact of higher oil prices, though other sectors will probably feel the effects. He warned that European earnings forecasts could weaken in the coming months and that the longer high energy prices persist, the greater the chance that estimates come down more broadly.
With earnings season continuing, investors are weighing ambitious AI investment plans against the discipline needed to sustain margins and returns — a balancing act likely to shape market leadership through mid-year.