Google parent Alphabet Inc, Microsoft Corp and Amazon.com Inc made headway in the latest quarter in the areas that will be their main engines of growth for years to come, driving up shares across the tech sector on Friday.
Shares of all three surged in early trading, adding more than $120 billion to their combined market value -- more than the GDP of Morocco.
For Alphabet, search traffic on mobiles surpassed desktop traffic worldwide for the first time. Amazon was able to boost margins, an area of concern, as its cloud business boomed.
Microsoft's growing emphasis on cloud computing under Chief Executive Satya Nadella also put the company on track -- successful transition away from its slowing business that relies on sales of personal computers.
Alphabet's shares jumped 10.5% to a record high of $752.50 in early trading, adding about $50 billion to its market value giving Alphabet a market cap of about $522.5 billion.
This gave Alphabet its position as the second-most valuable stock after Apple Inc, which is valued at $660 billion.
Microsoft's shares jumped 11.6% to $53.61-their highest in 15 years - while Amazon surged as much as 10% to $619.45, also a record high. The tech-heavy NASDAQ composite index was up about 1.8%.
"I think what you're seeing is these companies finally able to address the primary challenges that have been facing the businesses," said James Cakmak, an analyst at brokerage Monness, Crespi, Hardt & Co in New York.
"For Amazon it's about margins, for Alphabet its mobile, for Microsoft it's the cloud computing or diversifying away from its legacy businesses" he further said.
The better-than-expected results are a bright spot for the market. This followed a period of "intense volatility" over China or the U.S interest rate-hike.
Before the start of the third-quarter reporting season, corporate earnings had been expected to fall by 4.1%, according to Thomson Reuters data.
"Even as the global economy slows down, the three companies results show that the US economy continues to function well," said Adam Sarhan, chief executive of investment advisory firm Sarhan Capital in New York.
"The technology sector, specifically the Internet sector, remains bright," he said.
Cloud computing remains the priority for Alphabet, Amazon and Microsoft as large enterprises shift to Internet-based services to host and manage their data.
"I think the combination of Amazon, Microsoft and Google, as the technology leaders of the world, each showing accelerating growth in their Internet-related businesses, represents a very powerful statement," said Frederick Moran, an analyst at brokerage Burke and Quick Partners in Uniondale, New York.
While selling cloud storage space to enterprises remains a miniscule part of Alphabet's revenue, it still remained a 'growing priority' said Google CEO Sundar Pichai said on Thursday.
"Every business in the world is going to run on cloud eventually. So, we view it as an amazing opportunity," Pichai said.
