S&P 500 Hits Record 6,450 Points as Tech Giants Crush Earnings Forecasts
The benchmark US equity index reached a new all-time high as Microsoft, Alphabet, and Meta reported earnings that exceeded Wall Street expectations by an average of 18%.
The S&P 500 has now gained over 28% in the past 12 months, one of its strongest runs since 2019.
Key Points
- S&P 500 closed at 6,450 — a new all-time high
- Microsoft reported 22% revenue growth, beating estimates by $2.1B
- Alphabet advertising revenue accelerated to 19% year-over-year growth
- Meta monthly active users crossed 4 billion for the first time
- AI capital expenditure across Big Tech exceeded $120B in Q1 2026
The S&P 500 closed at a record 6,450 points on Friday after a blockbuster week of tech earnings that demolished Wall Street forecasts and renewed confidence that corporate America is navigating the interest-rate environment with surprising ease.
Microsoft, Alphabet, and Meta collectively beat earnings expectations by an average of 18% in their latest quarterly reports, driven by accelerating cloud revenues, surging AI product revenues, and advertising markets that have recovered sharply from their 2023 lows.
The Earnings That Moved Markets
Microsoft reported revenue of $72.3 billion for its fiscal Q3 — a 22% year-over-year increase that surpassed analyst consensus by $2.1 billion. Azure cloud revenue grew 35%, with AI services (including Copilot integrations across Office 365) now contributing $8 billion in annualized revenue.
Alphabet reported advertising revenue growth of 19% — the fastest pace since 2021 — as YouTube and Search both showed accelerating monetization. Google Cloud grew 28%, and the company's AI Overviews feature has driven a 14% increase in Search query volume.
Meta crossed 4 billion monthly active users for the first time in its history, while average revenue per user rose 24% globally. AI-driven ad targeting improvements were credited with the outperformance.
"This earnings season has definitively answered the question of whether AI spending translates to revenue. It does, and faster than anyone expected." — Morgan Stanley Equity Research
What This Means for the Market
The S&P 500 now trades at approximately 22x forward earnings — elevated by historical standards, but not extreme given the interest-rate trajectory. With the Fed signaling rate cuts ahead, many strategists have raised their year-end targets for the index, with Goldman Sachs now projecting 6,800 by December.
