Good afternoon, Five Star Traders!
Volatility has been the name of the game this week as the market digested the final wave of Mag 7 earnings. Wednesday’s reports kicked things off, and the follow-through into Thursday and Friday has been nothing short of explosive for a couple of the leaders. Let’s break it down.
Mag 7 Earnings Recap: MSFT & AMZN Deliver, AAPL Disappoints
Microsoft reported after the close on Wednesday and absolutely crushed it. Adjusted EPS came in at $4.74 versus the $4.24 estimate, revenue hit $90.01 billion (up 18% year-over-year and ahead of the $87.6 billion consensus), and Azure grew an impressive 43%. Commercial remaining performance obligations surged 84% to $678 billion, and guidance indicated continued strength, with Azure expected to grow around 45% next quarter. The stock exploded higher, ultimately delivering one of the largest single-day market-cap gains in history and finishing the week near $462, up from the low of $387.
Amazon followed on Thursday, matching the energy. Revenue jumped 20% to $200.6 billion, operating income rose 43% to $27.5 billion, and AWS delivered its fastest growth in 18 quarters—up 37% to $42.2 billion (a $169 billion annualized run rate). Even with elevated AI-related spending and a temporary free cash flow hit, the market rewarded the clear acceleration in the cloud business. Shares surged double-digits into the close of the week.
Apple’s report on Thursday was the outlier. Revenue of $109.4 billion (up 16%) and EPS of $2.02 both beat estimates, driven by strong iPhone sales. However, Services came in light, Greater China was soft, and the September-quarter guidance of only 9–11% revenue growth (citing supply constraints) sent the stock down roughly 9–10% in the reaction. Leadership transition headlines added to the noise, but the numbers themselves were solid—just not enough to clear the high bar.
Overall, the AI/cloud theme remains firmly intact for Microsoft and Amazon, while Apple’s more consumer-driven story continues to lag the pure hyperscalers on relative strength.
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Microsoft Technicals: Weekly Breakout Signals the Bottom
Now for the part that really stands out on my charts. MSFT’s weekly price action is textbook. After the multi-month correction from the $555 high, the stock spent months grinding lower and consolidating beneath a tight cluster of declining moving averages and prior swing resistance. This week’s candle changed everything. Price opened near $390, traded as low as $388, then ripped to a high of $464.80 and closed at $462.71 on heavy volume. That single weekly bar sliced cleanly through the major resistance zone that had capped every rally attempt since late 2025.
The SqueezePRO histogram has flipped decisively positive, TurboVZO is curling higher out of deeply oversold territory, and the longer-term structure has shifted. In short: Microsoft has bottomed on the weekly timeframe. As mentioned previously, it was extremely unlikely that Microsoft could have a big enough move to break this downtrend, but with this report, it was able to achieve just that. The path of least resistance is now higher, and this is the kind of clean breakout we look for in high-quality names after a prolonged period of digestion.
I’ll be watching the next couple of weekly closes for follow-through, but the technical message is loud and clear.
Looking ahead to next week’s earnings calendar:
Keep an eye on several high-profile reports that could keep the AI and tech volatility rolling—Palantir (Monday), AMD (Tuesday), Uber (Wednesday), plus Datadog, and Cloudflare. The jobs report on Friday will also be a major macro catalyst. Stay selective and manage risk tightly around these binary events.
Happy Friday!
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The information contained in this newsletter is solely for educational purposes and does not constitute investment advice. Trading involves substantial risk of loss.
