No end in sight for the new dotcom boom as Alphabet, Amazon and Microsoft shares soar after results are better than expected

US stock markets hit new peaks on Friday after forecast-beating results from the technology companies including Google’s parent company Alphabet, Amazon and Microsoft .

All three saw their shares soar to record highs in the wake of better than expected quarterly updates, adding billions in revenues and increasing profits compared with the same three-month period in 2016.

Overall, the technology-heavy Nasdaq Composite index rose 1.6%, hitting a record high of 6,664 by mid-morning in New York. The S&P technology index – which has gained about 30% so far this year – added 2.6% to a new peak of 1,086.

Many analysts had become concerned that the value of technology shares had reached unsustainable levels and could be heading for a sharp correction, but the results from the three companies announced after the market closed on Thursday allayed fears of a new dotcom bubble.

Eric Wiegand, the senior portfolio manager at US Bank Private Wealth Management, told Reuters: “While valuations are full, it certainly becomes imperative on them to deliver solid operating results and that’s something that we did see.”

Amazon shares jumped more than 11% in early dealings on Wall Street, with third quarter revenues up 34% to $43.7bn, helped by its recent purchase of the Whole Foods Markets chain.

Microsoft’s share price added nearly 8% as investors welcomed news of a 12% rise in revenues to $24.5bn, better than the expected $23.56bn.

Adding to the technology bonanza was Alphabet, which saw revenues jump 24% to $27.8bn, with stronger than expected advertising sales at Google and a strong performance from YouTube. Concerns about the company’s dominant market position have yet to hit its financial results, and the shares rose about 6%.

Amazon’s share price rise added nearly $9bn to the value of the 17% stake in the business owned by chief executive Jeff Bezos.

The rise took his total wealth to about $92.5bn and allowed him to overtake Microsoft founder Bill Gates as the world’s richest man. Gates’ gain on Friday amounted to about $550m, taking his wealth to $88.5bn, although he has given away much of his fortune to charity.

This is the second time Bezos has become the world’s richest man. In July, hopes for positive second quarter figures from Amazon lifted the company’s shares and briefly pushed Bezos above Gates in the rankings. But the results disappointed investors , Amazon shares fell back and Gates regained his crown.

This time Amazon has outperformed expectations, with net earnings at $256m or 52 cents a share, well above the forecasts of just three cents.

As well as the boost from Whole Foods’ grocery sales, Amazon benefited from its Prime Day promotion in the summer. After the results, Credit Suisse raised its target price for Amazon shares from $1,350 to $1,385.

But the effects of Amazon continuing to win business from older retailers reliant on physical stores was shown by a profit warning from department store JC Penney. Its shares dropped 17% after it said it was forced to sell off unwanted inventory at discount prices and warned it no longer expected an increase in full-year sales.

Microsoft, as part of its revival under chief executive Satya Nadella, has focused on its cloud computing business to offset flagging sales of its Windows software. Revenues from the cloud business – which includes products such as Office 365 – rose 14%, while the personal computers division slipped 0.2%.

Microchip maker Intel, up 5% after its results, and Twitter, 4% higher following slightly better than expected revenues, also added to the buoyant mood in the sector.

Apple, which saw strong demand for its iPhone X on its first day of sales on Friday, added 2% ahead of results next week. Facebook, which also reports next week, rose 3%.

But the Dow Jones Industrial Average edged up only 0.1%, weighed down by disappointing results from oil company Chevron and a downbeat report from pharmaceuticals business Merck, which suffered disruption to its business after a cyber attack earlier in the year. The Dow was also undermined by the dollar strengthening in the wake of a higher than expected third quarter GDP figure, adding to belief that the US Federal Reserve is likely to raise interest rates at its December meeting.

In Europe, most markets ended higher, thanks to weakness in the euro after Thursday’s European Central Bank meeting indicated a gradual reduction in its bond buying programme.

But Spain’s Ibex dropped more than 1% after the Catalan government controversially declared independence following the 1 October referendum.

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