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* Futures: Dow up 0.49%, S&P up 0.46%, Nasdaq up 1.12%

July 31 (Reuters) - Nasdaq futures led gains on Friday, with

Amazon's ( AMZN ) shares jumping 12% after the Big Tech company

joined some of its peers in delivering strong cloud revenue

growth, putting to rest concerns about AI returns that had

driven this month's volatility.

Limiting some optimism, Apple ( AAPL ) warned that supply

constraints would hurt growth, prompting investors to look

beyond near-term shortages to gauge the hit from an expected

iPhone price hike as its shares dropped 7.3% in premarket

trading.

This week was what some analysts called the 'make-or-break'

week for the tech sector that had been rattled by investors

taking some profits through July following a strong end to the

second quarter, as they awaited signs that investments made by

AI leaders at the expense of free cash flow were paying off.

Amazon ( AMZN ) reported its biggest revenue growth in over four

years for the previous quarter on Thursday, joining similar

reports from Microsoft ( MSFT ) and Alphabet earlier

this month, prompting investors to look past the big drop in

cash flows that the companies also logged.

"It is no longer enough to beat overall estimates; companies

must also reassure investors about the drivers of future

growth," said John Plassard, head of investment strategy at Cité

Gestion.

"Ultimately, Amazon ( AMZN ) confirms that the momentum in artificial

intelligence continues to support the hyperscalers, while Apple ( AAPL )

reminds us that its main challenge now remains

accelerating its AI strategy while sustainably reviving its

growth in China."

Shares of Microsoft ( MSFT ) dipped 0.8% after logging its biggest

one-day gain on record for a company in the previous session,

while Alphabet added 2.3%, Meta advanced 2% and Tesla

rose 1.6%. Chip stocks Nvidia ( NVDA ) climbed 1.5% and

Micron gained 3.5%.

At 5:37 a.m. ET, Dow E-minis were up 259 points, or

0.49%, and S&P 500 E-minis were up 34.5 points, or

0.46%. Nasdaq 100 E-minis were up 316 points, or 1.12%.

TOUGH MONTH FOR STOCKS

All three of Wall Street's main indexes are on track for

weekly gains, aided by the strong rebound late this week, but

are on track for monthly losses reflecting the sharp selloff

AI-linked stocks witnessed through July.

The Philadelphia Semiconductor index is still down

over 20% in July, which would mark its biggest monthly fall

since the housing bubble burst in late 2008. Investors instead

took notice of other sectors, as the S&P 500 equally weighted

index is on track for its fourth-straight month of

gains.

"This momentum crash was tremendous and the positioning has

been rinsed," said Laurent Clavel, global head of multi-asset,

AXA Investment Managers at BNP Paribas Asset Management.

"Going into August, if anything, we are going back into it

slowly. We're buying this weakness and we're re-buying this AI

narrative," Clavel said.

The week also brought uncertainty in terms of interest rates

after the Federal Reserve left interest rates on hold. Chairman

Kevin Warsh's commentary and a broadly benign inflation report

on Thursday left investors pricing in a 36.8% chance that

interest rates could be left unchanged in September, up from

about 20% last week.

The University of Michigan's July consumer sentiment survey

is due at 10 a.m. ET.

GoDaddy ( GDDY ) lost 12.4% after the domain registrar

narrowed its annual revenue forecast.