Welcome to Week 17 of the Big Idea Portfolio. After last week's big giveback, Apple (Nasdaq: AAPL) came through with a huge quarter and Rackspace Hosting (NYSE: RAX) also rallied. Details on these companies and more in a minute. First, let's dig into the numbers.

Company

Starting Price*

Recent Price

Total Return
Apple $422.46 $603.00 42.7%
Google $650.09 $614.98 (5.4%)
Rackspace Hosting $41.65 $58.99 41.6%
Riverbed Technology $25.95 $20.65 (20.4%)
Salesforce.com $100.93 $156.80 55.4%
AVERAGE RETURN -- -- 22.78%
S&P 500 SPDR $127.15** $140.44 10.45%
DIFFERENCE -- -- 12.33

Source: Yahoo! Finance.
* Tracking began at market close on Jan. 6, 2012.
** Adjusted for dividends and other returns of capital.

Apple led a busy earnings week. The Mac maker blew away fiscal second-quarter estimates, thanks largely to further worldwide demand for the iPhone. Revenue soared 59% to $39.19 billion, while profits zoomed 92% to $12.30 a share as Apple sold 35.06 million iPhones during the quarter. Wall Street had been expecting just $10.06 a share on $36.81 billion in revenue and 30.59 million iPhones sold.

And that's not even the most impressive part of the story. Gross margin climbed 6 percentage points year over year to 47.4% on lower component costs, a handful of one-time benefits, and a better product mix. Apple expects to maintain at least a 41.5% gross margin in the fiscal third quarter.

Impressed? You should be. Big margins helped Apple produce $14 billion in cash from operations during fiscal Q2, growing its overall balance of cash and investments to $110 billion as of this writing. The Mac maker may as well have its own bailout fund.

In other earnings news, Netflix (Nasdaq: NFLX) sold off sharply when investors expressed disbelief at CEO Reed Hastings' prediction that the company would pull in 7 million domestic subscribers by the end of the year. Akamai Technologies (Nasdaq: AKAM) also fell more than 12% when management admitted that margins on earnings before interest, taxes, amortization, and depreciation would remain low for the next several quarters because of ongoing investments in the business. CEO Paul Sagan also announced a plan to step aside by the end of next year

And what of Rackspace? Surprisingly strong reports from Equinix, a data-center operator and partner, and Amazon.com could account for the rally. At least one analyst sees the e-tailer's cloud computing business, known as Amazon Web Services, or AWS, growing to be a better than $6 billion business by 2016. That's probably at least a fourfold increase over the current revenue run rate and suggests powerful growth trends for all industry participants, including Rackspace.

The week that was
Stocks surged on Apple's good news, with the Nasdaq's 2.29% leading all indexes save for the small-cap Russell 2000, which closed up 2.66%. The S&P 500 advanced 1.8%, while the Dow Jones Industrial Average became the first to enter positive territory for the month with a 1.53% gain.

With the rally comes confidence. The CBOE Volatility Index, or "VIX," widely regarded as the best measure of fear in the market, fell another 6% one week after falling 10% and is down more than 30% year to date. That's good news, to be sure, but the right move in any market is to stay invested in great companies for the long haul.

See you back here next weekend for more tech-stock talk. And remember to check out the Fool's latest special report -- "5 Stocks Investors Need to Watch This Earnings Season" -- and add the Big Idea portfolio stocks to your Foolish Watchlist for ongoing, up-to-the-minute coverage. Both the report and the Watchlist are 100% free to use: