The AI trade roared back to life on July 31, 2026, as blockbuster earnings from Microsoft and Amazon validated the thesis that massive artificial intelligence capital expenditure is generating real revenue growth, sending semiconductor stocks and AI infrastructure names sharply higher after a bruising July selloff.
Microsoft and Amazon Set the Stage
Microsoft surged roughly 16% on Thursday after reporting Azure cloud growth that exceeded expectations, with AI services driving adoption across enterprise customers. Amazon added more than 9% in extended trading as AWS cloud sales jumped 37%, marking a fifth consecutive quarter of acceleration. Together, the two companies spend tens of billions annually on AI infrastructure, creating a direct revenue pipeline for chipmakers and data-centre operators.
Semiconductor Surge: Global Leaders
The iShares Semiconductor ETF (SOXX) climbed more than 8% during Thursday's regular session. Individual chipmakers extended gains in after-hours trading:
- Nvidia (NVDA): Up 0.7% after-hours, building on its dominant AI accelerator position
- AMD: Gained 3%, benefiting from data-centre CPU and GPU demand
- Intel: Rose 4.3%, continuing its recovery narrative under new leadership
- Micron: Advanced 3% on strong memory demand for AI workloads
- SK Hynix: Skyrocketed in Seoul, tracking the U.S. rally as the leading HBM memory supplier for AI chips
- Samsung Electronics: Surged alongside SK Hynix on renewed AI spending optimism
From July Selloff to August Optimism
The rally follows a difficult July for AI infrastructure stocks. The Philadelphia Semiconductor Index dropped 28.6% from its June 22 peak, and concentrated leveraged positions in AI names triggered margin calls that forced selling by major funds. Citadel stepped in to absorb a forced seller, according to Financial Times reporting, removing a key source of downward pressure.
Implications for Crypto and Broader Markets
The AI-crypto connection is indirect but real. Both asset classes compete for the same pool of growth-oriented capital. When AI stocks deliver earnings that justify their valuations, capital rotates from speculative crypto positions into equities with visible revenue streams. Conversely, when the AI trade works, it signals risk appetite is returning, which eventually supports Bitcoin and high-beta altcoins.
For the full market context, read our global markets rebound analysis and AI valuation debate.