The latest earnings week has handed investors a clear shortlist of US stocks to watch in August. Three of the market’s largest companies just reported, and Wall Street split its verdict between reward and punishment.
The divide came down to one test, which AI spender could prove that customers are paying for the build. It left the winners with strong setups and one laggard facing a cautious road into August.
Microsoft (NASDAQ: MSFT)
Microsoft soared about 15% to near $451 after its July 29 results, its biggest jump in months. Trading volume, the number of shares changing hands, hit its highest since June 22, which shows strong conviction behind the buying.
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Yet the rally is not fully convincing. That volume still sits below the heavy selling of late June, so buyers have not fully overpowered sellers.
The Chaikin Money Flow (CMF), a gauge of whether institutional money is flowing into or out of a stock, shows the same doubt. It nearly turned negative before earnings, then rose to 0.04 as big investors reacted. It still sits below its July 24 peak, and it must reclaim that level to confirm institutions are truly buying.
The fundamentals explain the jump. Microsoft spent $41 billion on capital expenditure, the cost of building AI data centers, but backed it with a $678 billion book of signed customer contracts. That locked-in demand proves the spending is funded by real orders, which is the bullish case. It also guided Azure cloud growth toward 45%, and faster growth at that scale points to rising future revenue.
Wall Street agrees. The stock holds a Strong Buy rating, with 24 of 25 firms on Buy, signaling broad expectations of more upside.
Only Barclays trimmed its target, a lone caution that matches the soft volume.
Amazon (NASDAQ: AMZN)
Amazon carries the strongest analyst support of the three, making it one of the more bullish US stocks to watch into August. All 28 covering firms rate it Buy, with none on Hold or Sell, and every major desk raised its price target after earnings. That rare unanimity gives Amazon the cleanest bull case of the week.
Options positioning backs that optimism. The put-to-call volume ratio, which compares bearish bets against bullish ones, fell from 0.74 to 0.54 into the print, meaning traders bought far more calls and leaned bullish.
The open interest ratio, the standing option contracts already in place, held steady at 0.66. That shows longer-term money has not fully committed yet, which leaves room for new buyers to lift the stock in August.
The business explains the confidence. Amazon Web Services, its cloud arm, reaccelerated, and the company disclosed a $496 billion backlog of signed customer demand. When Alphabet and Meta raised their AI spending, investors sold both stocks, fearing spending with no proven payoff. Amazon raised spending too, but its backlog proved customers had already agreed to pay, so the stock rose instead.
There is a catch worth knowing. Amazon’s headline $5.75 per share reads like a huge beat, but most of it came from a one-time paper gain on its Anthropic stake, not from the core business. Strip that out, and profit still rose a healthy 43%, so the bull case holds. The real pressure is cash, because heavy AI spending has pushed free cash flow, the money a company keeps after building, into the red over the past year.
Meta Platforms (NASDAQ: META)
Meta is the outlier among the top US stocks to watch. The stock fell about 8% to near $539 and now sits roughly 23% below its mid-July high.
The problem is cash, not sales. Revenue grew 28%, but free cash flow collapsed to $784 million from $8.55 billion a year earlier. Capex nearly swallowed all the cash the business generated, so Meta leaned on about $25 billion of new debt to keep funding its dividend, which unsettles investors.
Unlike Microsoft and Amazon, the other two US stocks to watch, Meta disclosed no backlog of signed demand, so it cannot yet prove the AI build will pay off. Its core apps also earned less, as Family of Apps operating income, the profit from Facebook, Instagram and WhatsApp, slipped to $23.4 billion from $25 billion. The strongest ad engine on earth delivered a weaker bottom line.
The chart warns of more risk. Meta’s CMF trended lower even as the price climbed from early June to mid-July, and a deep correction followed. It still has not cleared the 0.05 line that would confirm buyers are back, so the same bearish drop could repeat.
Analysts stay loyal but nervous. Meta keeps a Strong Buy, yet at least ten firms cut price targets overnight, including Citi to $800 from $850.
That lower ceiling with unchanged ratings signals near-term caution even from believers.
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