Microsoft and Amazon both saw their stocks surge again Monday, riding a post-earnings tech wave across the stock market that pushed Amazon past $3 trillion in value for the first time.

The gains follow earnings reports last week in which both companies’ cloud platforms exceeded expectations. Microsoft said Azure grew 43%, passing $100 billion in annual revenue for the first time. Amazon said AWS grew 37%, its fastest pace in 18 quarters.

Microsoft and Amazon are now the world’s fourth and fifth most valuable companies, respectively. The three ahead of them (Nvidia, Alphabet and Apple) are all headquartered in the Bay Area, although each has sizeable engineering centers in the Seattle region.

Amazon rose 4.6% in intraday trading to $284.15 as of publication time, after touching an all-time high of $287.20 earlier in the session, giving it a market value of $3.06 trillion.

Microsoft climbed 5.2% to $488.97, worth $3.63 trillion. Its rally began Thursday, when it added nearly $450 billion in market value, the largest one-day gain by any company on record.

The rallies came despite AI spending plans that have unsettled investors for much of the year. Microsoft went into earnings near a one-year low, after a $357 billion wipeout to start the year.

It’s all still coming at a huge cost. Microsoft spent a record $41 billion on capital projects last quarter and told investors to expect more than $50 billion in the current quarter. Amazon raised its 2026 forecast to about $220 billion from $200 billion, citing rising memory chip prices.

In one sign of the impact of the spending, Microsoft’s free cash flow fell 23% last quarter. Amazon’s free cash flow turned negative for the first time since 2023.

But cloud growth and other signs of demand for AI seem to have appeased investors for now.

Amazon CEO Andy Jassy told investors the spending reflects unmet demand: “Even at that amount, we will still not have enough capacity to meet all the demand we have in 2026, and I believe this dynamic will also be true in 2027 too. In fact, the demand we already have for 2028 is striking.”

The gains come as both companies operate with fewer people. Amazon confirmed 16,000 more corporate job cuts in January, bringing the total to 30,000 since October, along with more recent reductions in its robotics and artificial general intelligence groups.

Microsoft cut 4,800 jobs in July, revamping its salesforce and overhauling Xbox.

The number of product research and development roles at Microsoft declined for the second straight year, according to the company’s annual regulatory filing, offering a new indication of how the tech giant is reshaping its workforce in the AI era.

Microsoft’s total headcount declined by 5,000 people to 223,000 as of June 30, according to its Form 10-K, filed with the SEC this week. It’s the first annual employment decline for Microsoft since 2016, when the company was writing off and winding down its Nokia smartphone business.

The trend is notable in part because, over the same time period, Microsoft’s revenue rose 18%, or $50.1 billion, to $331.8 billion — the largest one-year increase in the company’s history.

Here’s how the employment trends break down:

• Product R&D roles represented the majority of the net decline, falling by 3,000, to 77,000 — down from a peak of 81,000 in 2024.
• Operations roles, now Microsoft’s largest employment category, held steady at 89,000 after growing by 3,000 the year before. It includes datacenter operations, product support, consulting, and manufacturing and distribution.
• Sales and marketing roles declined by 1,000, to 43,000, and general and administration by 1,000, to 14,000.
• The reductions fell disproportionately on Microsoft’s U.S. workforce, which declined by 4,000, to 121,000. International employment declined by 1,000, to 102,000.

The numbers reflect the roughly 9,000 jobs Microsoft cut on July 2, 2025, two days into its fiscal year. They do not reflect the 4,800 cuts announced July 6 of this year — spanning sales, consulting and Xbox — or the thousands of U.S. employees who left in early July under the company’s first voluntary retirement program.

On the earnings call Wednesday, CFO Amy Hood confirmed that “total company headcount declined 2% year over year.” She linked a 10% increase in operating expenses to “continued investment in R&D compute capacity, talent, and data to support product development across the portfolio.”

AI coding tools — including Microsoft’s own GitHub Copilot — have become a standard part of how software is built at Microsoft and across the industry, reducing the number of people and the amount of time it takes to ship products, while often expanding the total scope of the work.

Microsoft has repeatedly declined to link its job cuts to AI. Chief People Officer Amy Coleman said in a memo earlier this month that the roles being eliminated were not being directly replaced by AI, while acknowledging that “AI is changing how work gets done.”

Tech companies have been keeping a tighter rein on operating expenses, primarily through job cuts, in part to offset soaring capital expenses to support their AI infrastructure buildouts. Microsoft’s capex reached $41 billion in the June quarter alone.

Microsoft is also moving engineers out of product development and into customer-facing roles. The Microsoft Frontier Company, a $2.5 billion initiative announced July 2, brings together more than 6,000 people to embed engineers inside customers building AI systems — a group drawn “primarily from Microsoft’s existing engineering and forward-deployed teams,” according to the company.