The S&P 500 closed at a record high of 6,247.89 on Wednesday, surpassing the previous peak set earlier this year as technology giants led a broad rally following earnings that exceeded analysts' expectations. The index has gained 14 percent year-to-date, driven by artificial intelligence-related stocks that have become the dominant force in equity markets.
Microsoft reported revenue of $78.4 billion for the quarter, a 19 percent increase from the same period last year, fueled by insatiable demand for its AI products and cloud computing services. The company's Azure division, which now accounts for 42 percent of total revenue, grew 31 percent year-over-year.
"The AI revolution is accelerating, and every major corporation is racing to integrate these capabilities into their operations," said Microsoft CEO Satya Nadella during the earnings call. "We are seeing demand that exceeds our ability to supply in the near term."
The rally extended to other technology leaders, with Alphabet, Meta, and Amazon all reporting strong results that reinforced confidence in the sustainability of AI-driven growth. Analysts at Goldman Sachs raised their year-end S&P 500 target to 6,500, citing the broadening nature of the current rally.
"What we are seeing is not just a technology story but an economy-wide adoption of AI tools that are driving productivity gains across industries," said Goldman Sachs Chief Equity Strategist David Kelley. "The earnings season has validated our thesis that AI spending will remain elevated for years to come."