What's going on?

Amazon and Alphabet both reported their first quarter financial results on Thursday � and both companies saw their stocks jump higher as their performance beat Wall Street�s expectations!

What does this mean?

Despite some potential speed bumps, these tech giants just keep delivering (tweet this). Amazon fought off concerns that its cloud business might start suffering from more competition (it didn�t, really). Meanwhile, investors were worried that revenue at Alphabet�s Google might be hurt by advertisers pulling ads due to the recent controversy concerning YouTube ads appearing alongside objectionable content. But the impact appears to have been minor (at least, so far). In short, it was pretty tough to quibble with another strong quarter from these tech giants.

Why should I care?

For the markets: Expectations for tech stocks keep increasing but, so far, tech companies keep hitting them.

As tends to happen when a stock performs well, more and more investors hop on the bandwagon and push the price up even higher � as has happened with Amazon and Alphabet. Sometimes, investors� optimism gets far ahead of reality and the stock prices come crashing back to earth, but that�s just not happening with popular tech investments such as Amazon, Alphabet, Facebook and Netflix. Amazon and Alphabet were both up almost 5% to fresh all-time highs after reporting their results.


The bigger picture: Investors love growth � and it�s scarce right now.

Investors crave growth because it�s higher future profits that ultimately drive long-term returns for stocks. And while companies this earnings season have exhibited some of the best revenue and profit growth in recent years, growth remains at a relatively low level historically. That puts a premium on companies that are growing, whether they are relatively small startups being privately funded or the biggest companies in the world having investors push up their stock prices.