E-commerce giant Amazon reported earnings per share of 52 cents a share, way ahead of a Thomson Reuters estimate of 3 cents a share. Amazon Web Services, the company’s cloud business, was its main driver for growth, with sales leaping 42 percent on a year-over-year basis.
Amazon also received a boost in sales from Whole Foods, which it acquired in late August.
“We would characterize last night’s Amazon September results as a ‘Picasso-like quarter’ with the company handily beating all metrics across the board,” Daniel Ives, head of technology research at GBH Insights, said in a note Friday. “Last night’s quarter … is another feather in Bezos’ cap.”
Microsoft, meanwhile, beat Wall Street earnings expectations by 12 cents a share as its commercial cloud business topped $20 billion in annualized revenue for its fiscal first quarter. The stock was on track to post its biggest one-day gain since October 2015 and broke above $1,100 for the first time.
Google-parent Alphabet reported adjusted earnings per share of $9.57, well above a Thomson Reuters estimate of $8.33 a share, as the company saw a higher-than-expected surge in the volume of clicks on Google ads across the world, especially in Asia.
“We were amazed when we were getting the numbers last night,” said Randy Warren, CIO at Warren Financial. “This rally is based on earnings.”
“When you look at why the indexes are moving up, it’s because of real earnings growth, and there are no signs of that abating,” Warren said.
Tech was best-performing sector on Friday, with the Technology Select Sector SPDR ETF popping 2.7 percent and hitting its highest level since March 2000.
Information technology has handily outperformed the broader U.S. stock market this year. The sector is up about 30 percent in 2017, while the S&P 500 has gained approximately 15 percent.
The broader market also rose on Friday, receiving a boost from stronger-than-expected economic data. The S&P 500 gained 0.8 percent and hit a record high.
The first reading on third-quarter GDP showed the U.S. economy grew by 3 percent, above an estimate of 2.5 percent.
“There were some inventory disruptions because of the hurricane but the economy is doing pretty well,” said David Kelly, chief global strategist at JPMorgan Funds.
Hurricanes Harvey and Irma struck parts of Texas and Florida in late August and early September. Excluding inventory investment, the economy grew at a 2.3 percent rate, slowing from the second quarter’s 2.9 percent pace.
Equities have reached record highs recently in part because of improving economic data. Consumer sentiment hit 100.7 in October, just below the expected 100.8.
—CNBC’s Anita Balakrishnan and Reuters contributed to this report.