* March PCE data in line with estimates

* Alphabet jumps on first-ever dividend, $70 bln buyback plan

* Microsoft gains after earnings beat estimates

* Indexes up: Dow 0.59%, S&P 1.19%, Nasdaq 2.09%

NEW YORK, April 26 (Reuters) - U.S. stocks rose on Friday, buoyed by a rally in megacap growth stocks following robust quarterly results from technology heavyweights Alphabet and Microsoft in addition to moderate inflation data.

Investors cheered Alphabet's first-ever dividend, its $70 billion stock buyback program, and better-than-expected first-quarter results. Its shares jumped 10.4% to a record high, lifting the Google-parent's market value above $2 trillion.

Microsoft shares rose 2.7% after its third-quarter revenue and profit exceeded Wall Street estimates, driven by gains from artificial intelligence (AI) adoption across its cloud services.

Other megacap growth stocks also traded higher: Amazon.com and Nvidia rose 3.5% and 5.8%, respectively. However, Meta Platforms, Apple and Tesla were down. On Wednesday, Meta results disappointed investors even as the company ratcheted up spending on AI.

Eight out of the 11 major S&P 500 sectors were trading higher, led by gains communication services, technology, consumer discretionary and materials. "The earnings reports of Microsoft and Google allayed a lot of the concerns about the fact that the spending on data centers and AI, which Meta had raised a day before, was going to compress margins," said Tom Plumb, president and lead portfolio manager at Plumb Funds in Madison, Wisconsin.

"Both Google and Microsoft had indicated that with their current capital plans, they still expected their margins to expand. That allayed a lot of the fears that people had about the growth of data computing," Plumb added.

At 02:16 p.m. the Dow Jones Industrial Average rose 226.04 points, or 0.59%, to 38,313.61, the S&P 500 gained 59.87 points, or 1.19%, to 5,108.29 and the Nasdaq Composite gained 325.84 points, or 2.09%, to 15,937.60.

U.S. Commerce Department data showed monthly inflation rose moderately in March on an annual basis while coming in line with estimates on a monthly basis.

The report offered some relief to financial markets spooked by worries of stagflation a day after data showed inflation surging and economic growth slowing in the first quarter.

After the data, money markets priced in a firmer chance of a Federal Reserve rate cut in September. The yield on the benchmark 10-year Treasury note fell after the data, last standing at 4.6692%.

Shares of Snap surged nearly 28% after the social media firm beat first-quarter estimates for revenue and user growth. Pinterest was also up 4.1%.

Exxon Mobil lost 2.2% after America's largest oil company missed analysts' estimates with first-quarter profit falling 28% from a year ago.

Intel dropped 9.9% after the chipmaker's forecast for second-quarter revenue and profit did not meet estimates. Intel faces weak demand for its traditional data center and PC chips.

Advancing issues outnumbered decliners by a 3.04-to-1 ratio on the NYSE. On the Nasdaq, 2,737 stocks rose and 1,323 fell as advancing issues outnumbered decliners by a 2.07-to-1 ratio.

The S&P 500 posted 20 new 52-week highs and 8 new lows while the Nasdaq recorded 50 new highs and 77 new lows.

(Reporting by Chibuike Oguh in New York; Shristi Achar A and Shashwat Chauhan in Bengaluru; Editing by Maju Samuel and David Gregorio)