US Stock Market Review for July 31

AMZN Takes the Baton from MSFT, Bolstering the AI Narrative
GOOG Follows Sentiment Recovery, Reclaiming Earnings Decline
META's Chicken Soup for the Soul, No Long-Term Worries
Semiconductor Sentiment Still Lacking

The thrilling July has finally come to an end. Congratulations to everyone on preparing to welcome August's risks! 😄

Let's review the performance of key indices in July:
S&P 500 fell by 0.13%
Nasdaq 100 fell by 6.6%
Semiconductor Index SOX fell by 20.6%
Storage ETF DRAM fell by 31.8%
It sounds like a rollercoaster with wailing everywhere. The semiconductor sector went through a bear market run. In reality, the broader market barely moved; it was just profit-taking funds shifting from semiconductors to other sectors.

META
Among this round of big tech earnings reports, META is the only one where high capital expenditure hasn't yet yielded direct returns. Many friends are feeling quite negative.
My view:
META won't crash. There have been many times in history when things were worse than now. From its historical highs, the maximum drawdown so far is only 30%. That's just the drop seen in two days of semiconductor volatility. It's a poor holding experience, but not disastrous.

It is currently in the same state Microsoft was in after last quarter's earnings report. Back then, retail investors around Microsoft were saying:
"The first giant to be replaced by AI" "Azure relies entirely on OpenAI" "Copilot isn't even worth using" "Legacy stocks have no hope" These voices suddenly disappeared on Wednesday~

META's Current Situation
Strengths: Advertising revenue continues to grow strongly; highly profitable.
Issues: AI has not disclosed quantifiable revenue; capital expenditures remain high; legal costs and layoff expenses are dragging down profits.

To put it another way, despite these issues, META still ranks 7th in market cap within the S&P 500. Its stock price hasn't broken below April's lows, and there has been clear fund inflow over the past two days. It hasn't exhibited the slow, bleeding decline seen with Oracle.

It only needs one strong earnings report—whether it's reducing capital expenditure, quantifying AI revenue, or boosting EPS—to turn things around.
Once the stock price breaks above $690, negative sentiment will naturally dissipate. As for dropping below $500, unless the entire S&P 500 pulls back significantly, we don't see that happening.

Maintaining my post-earnings view:
Wait for 1-2 more earnings reports. It is already significantly undervalued. There are no good stocks, only good prices. Now is an opportunity for long-term investment!

Semiconductors
Yesterday saw a violent rebound, and I had already warned that it entered a strong resistance zone. Today it opened high but pulled back, indicating that selling pressure remains heavy.
For those who haven't positioned in SOXX or SMH, this is still a chance to open initial positions. If it retraces to 450-465, continue adding to your position.

MSFT, AMZN, GOOG
The capital expenditure pressure for the three major cloud providers has completely dissipated. AI commercialization is developing rapidly. All three can look forward to new highs in the future.

Technically speaking:
MSFT: The area between 470-490 is strong resistance. The daily chart shows overbought conditions, so it needs to consolidate before pushing higher again.
AMZN: No resistance above. Target new highs.
GOOG: Today saw large volume gains, reclaiming the losses from the earnings report. A break above 370 signifies the end of this pullback. A break above 388 targets new highs.