- Shares of Amazon ripped higher while Apple stock tumbled on Friday.
- Apple issued guidance for the current quarter that disappointed investors as it grapples with a memory price surge and chip shortages.
- Amazon reported a surge in revenue at its key cloud business even as it projected spending to rise this year.
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Amazon shares surged 14% on Friday while Apple dropped 9% as investors reacted starkly differently to their June quarter earnings reports
Both companies reported on Thursday after the bell
Apple’s earnings, revenue and iPhone sales were all above market expectations; however, the company issued weak guidance for the current quarter, citing “supply constraints.” Apple said revenue growth in the current quarter will be between 9% and 11%, missing analysts’ expectations for 12% growth
The company is grappling with a huge shortage of memory, a key component in its devices, as well as competition for chip manufacturing capacity
This has led Apple to raise prices on the Mac and iPad, and analysts expect an iPhone price rise to come this year
Amazon, meanwhile, said revenue at its cloud computing business jumped 37% year-on-year in the second quarter, marking the strongest expansion since 2021. Its Amazon Web Services business is closely watched by the market, as this is where the company books most of its sales related to AI. Investors monitor this unit as an indication of the demand Amazon is seeing for its AI products
Amazon shares surged even as the company forecast its capital expenditures to hit $220 billion this year, up from a prior forecast of $200 billion, as it continues to invest in AI infrastructure
Investors have been scrutinizing spending from Big Tech on AI as concerns grow that these companies are spending ahead of demand. But Amazon’s own cloud growth appeared to justify the company’s capex
AWS’s strong growth “is a clear indicator that its infrastructure investments are meeting market demand rather than outpacing it,” Tracy Woo, principal analyst at Forrester, said in a note on Thursday
Amazon’s stock has been a laggard in 2026 and is up around 4% year-to-date. Apple meanwhile, has risen 23% across the same period. The iPhone maker is partly seen as an alternative trade to the tech players who have been spending heavily, as Apple has not gone on a huge capex expansion journey
Investors appear to be picking their AI winners during this earnings season, with the stock price moves of tech giants diverging
On Thursday, Meta sank 8% while Microsoft rallied 15% as investors took a different view on both companies’ AI strategies
— CNBC’s Kif Leswing contributed to this report
Apple and Amazon shares this year.
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