Mega-Cap Tech Stocks Soar as Short Sellers Scramble

The recent post-earnings rally in mega-cap tech has turned into a genuine squeeze for Microsoft and Amazon. Both companies delivered decisive beats on their late-July earnings reports, causing short sellers to scramble and cover their positions.

This forced-covering frenzy has powered the group across every session since the earnings prints. Microsoft's stock is up 27% over the past month, while Amazon's shares are up 14%. The Invesco QQQ Trust, which holds top positions in both companies, has also benefited from the move.

The rally reflects more than just a mechanical bid. Prediction markets on Polymarket now assign a 93.5% probability that Amazon's 2026 capital expenditures exceed $200 billion, signaling that traders read the move as validation of AI infrastructure demand, not just a fleeting cover-driven pop.