The reason? They smell value. While stock in nearly every other company with a claim on the AI boom has soared during the past 12 months—with Nvidia up 35%, Intel up 496%, and Micron Technology up 719%—Amazon’s stock gains have been relatively meager and haven’t yet caught up to the business results. Year-to-date, Amazon’s stock is up 3.4% and 10.1% for the past 12 months.

THE MARKETS

It’s not a bubble: Micron’s blockbuster earnings defy expectations; J.P. Morgan says AI capex is “remarkably profitable”

U.S. stock futures were strongly up before the opening bell in New York after computer memory chip maker Micron reported earnings that blew past analysts’ expectations. The company’s revenue was $50 billion, well above estimates of $43.2 billion. Notably, Micron raised its capex guidance again to above $25 billion. Jefferies analysts Masahiro Nakanomyo and Hisako Furusumi noted that it was the third capex guidance increase in a row: “Capex outlook was raised from $18.0bn (+30%) at the beginning of the fiscal year to $20.bn at 1Q, and then to $25.0bn at 2Q (+81% YoY).”

Micron stock rose 16% in overnight trading, leading a rally in tech stocks generally. Nasdaq futures were up 2.35% this morning, and S&P 500 futures were up 0.82%.

That set the stage for a global rally in equities today: Markets in Europe and Asia were up across the board this morning.

Chipmaker SK Hynix announced it would raise $29 billion in U.S. markets via American Depositary Receipts (certificates that allow traders to buy stock registered in South Korea). That would be the largest ever ADR offering and the equivalent of the second-largest IPO ever, ahead of Aramco and Alibaba and behind only SpaceX.

• S&P 500 futures were up 0.82% this morning. The index closed flat yesterday. 
• In Europe, the Stoxx 600 was up 0.52% in early trading and the U.K.’s FTSE 100 was up 0.29% before lunch.
• Asia: South Korea’s KOSPI was up 5.42%. Japan’s Nikkei 225 was up 4.61%. India’s Nifty 50 was up 0.36%. China’s CSI 300 was up 1.56%. 
• Brent crude was $72 per barrel this morning.
• Bitcoin was $61K.

Oil is nearly back to normal

The price of Brent crude oil fell to $72 per barrel this morning, from a high of $75 the day before, the level it was at before the war started. That gave investors some hope that the Fed won’t have to raise rates to deal with a stagflation scenario, according to Deutsche Bank’s Jim Reid.

Oil traffic in the Strait of Hormuz is slowly increasing but remains nowhere near pre-war levels. Before the war, 15 million barrels per day exited the strait, CNBC reported. Since the U.S. and Iran ceased hostilities, 4.8 million barrels per day are moving through. At least 20 tankers have made it out since the “memorandum of understanding” was signed.

Iran’s Islamic Revolutionary Guard Corps threatened any ship trying to pass through the Strait without its permission, warning that it would be “unacceptable and dangerous.”

J.P. Morgan sees another 6% gain for the S&P 500 but warns of “flash-crash” along the way

The S&P 500 will grow another 6% to 7,800 this year, according to a new forecast from Dubravko Lakos-Bujas and Bhupinder Singh at J.P. Morgan. “It’s important to keep in mind that the path upwards will be non-linear, as the market will need to clear various hurdles,” they wrote in their latest mid-year outlook paper. They believe there is too much momentum in low-quality, speculative tech companies. For instance, “2nd and 3rd order AI plays … [are] at risk of a reversal and continue to face high probability of a flash-crash.”

Claim: AI hyperscaler capex to hit $5.5 trillion, profitably. A big chunk of the growth will happen because the AI hyperscalers will keep the pedal to the metal when it comes to capex. “Hyperscaler capex has increased to $650 billion for 2026 and is likely headed above $1.1 trillion in 2027,” JPM’s Tarek Hamid and Nathaniel Rosenbaum said in the paper. “We expect total AI capex spending of $5.5 trillion through 2030, up from [their previous estimate of] $5.1 trillion in November.”

Significantly, they say this investment is profitable: “Hyperscalers remain remarkably profitable, with early returns on investment positive.” That’s important if you are worried that AI is a bubble.

• Read more: What bubble? JPMorgan says the $5.5 trillion AI capex explosion is profitable–for now - Sheryl Estrada

Tech stocks are still underperforming—everything else is up

Here’s a great chart from Ben Carlson at Ritholtz Wealth Management: unlike last year, when traders worried that gains in the S&P 500 were too heavily concentrated in the Magnificent 7 tech stocks, this year it’s the other way around. The tech-heavy Nasdaq Composite is down 4.43% over the last month.

“The S&P 493 is outperforming the S&P 500 and the Mag 7 by a wide margin,” he writes. “Ironically, the hyperscalers spending so much money on AI could be benefiting the rest of the market to their own detriment. In fact, the S&P 500 is up around 10% this year despite the fact that companies like Microsoft, Meta, Oracle and more tech stocks are in relatively large corrections at the moment.”

MORE FROM FORTUNE

Ikea’s billionaire founder was so frugal that he bought clothes from flea markets and took free salt and pepper from restaurants - Orianna Rosa Royle

Fortune 500 bosses demanding staff return to the office share one trait: narcissism, research finds - Claire Zillman

MacKenzie Scott alone accounted for one-third of America’s $19.2 billion in megagifts last year - Sydney Lake

Walmart’s $1.4 billion Vibe.co deal is a direct shot at Amazon’s booming ad business - Phil Wahba

Gen Z graduates are blaming AI for their unemployment woes when they should be looking somewhere else - Sasha Rogelberg

Maybank Singapore CEO Alvin Lee looks to tap the silver economy and cross-border flows to grow his business - Angelica Ang

CHART OF THE DAY

What’s wrong, Denver? No appetite?

According to a Bank of America survey of card spending across 21 major U.S. metro areas, Denver was the only city in which consumers reduced their spending on restaurants. Everywhere else, they increased their restaurant budgets. Portland, Ore., led the way with 6.9% growth. “However, some consumers have become more intentional about how often they dine out. In Bank of America card data, around 1% of households may have stopped transacting at restaurants, coffee shops and bars altogether, the bank’s Liz Everett Krisberg and David Tinsley said in an email.

NUMBER OF THE DAY

65%

The share of search traffic that will go to AI by 2030, according to an estimate from Cathie Wood’s ARK Invest. AI-related search advertising will increase about 50% annually, the group forecasts in its most recent “Big Ideas” slide deck: “AI ads are likely to take share from traditional search advertising, with monetization likely to follow with a two-year lag.”

THE FRONT PAGES TODAY

Trump pledges rapid U.S. response for Venezuela after historic earthquakes kill dozens - CNBC

The lurid lawsuit, salami scandal and trash-can thief vexing JPMorgan’s PR department - WSJ

Cathie Wood’s bet on football group turned crypto hoarder backfires - FT

Trump asks Congress for $87.6B, mostly for Iran war - Axios

NATO’s Rutte makes hard sell to Trump to ease Iran strains - Bloomberg

Visitors look at the reflecting pool and disagree on what they see - NYT

ONE MORE THING

"Complete train wreck": Reid Hoffman rips into Elon Musk

LinkedIn cofounder and venture capitalist Reid Hoffman has a dim view of Elon Musk’s AI strategy (in which SpaceX acquired xAI). It’s “buying your way into relevance” and “a complete train wreck,” he said in a conversation with Rana el Kaliouby on her Pioneers of AI podcast.

“SpaceX isn’t an AI company,” Hoffman said. “XAI is, as Elon himself has described, it’s a complete train wreck for its kind of building of foundational models and other kinds of things.” He also noted that all its founders have left, and it’s on its “third restart.”

• Context: There is no love lost between the two men. For years, Musk published posts on X suggesting—without evidence—that Hoffman’s fundraising ties to Jeffrey Epstein went deeper than was known. But when the Epstein files were released, they contained little that had not already been disclosed.