Amazon and Apple Earnings Split the Tape: AWS Surges While iPhone Supply Tightens

Traders leaving their desks Thursday evening rendered two very different verdicts on the season's final megacap reports. Amazon shares jumped more than 8 percent in extended trading after its cloud division posted its fastest growth in 18 quarters, while Apple fell roughly 6 percent despite a record June quarter, punished for a forecast constrained by chip shortages and currency headwinds. The Amazon and Apple earnings reports landed hours apart on July 30 and pulled the AI trade in opposite directions.

Both companies beat expectations on nearly every headline line, which makes the split reaction to the Amazon and Apple earnings the more telling signal. The divergence came down to what each report implied about the next two quarters: accelerating cloud demand and a windfall from an AI stake on one side, tightening component supply and a squeezed margin outlook on the other.

Options Desks Braced for an Outsized Move

Positioning ahead of the Amazon and Apple earnings showed how much money was staked on the outcome. Options markets implied a 3.4 percent post earnings move in Apple, more than double the stock's median 1.5 percent swing across its previous four reports, CNBC reported before the close. Benzinga calculated that a move of that size would shift roughly $170 billion in market value. Apple walked into the print near record levels, having touched a $5 trillion market capitalization on July 28, the first US company to reach that mark, and closing Wednesday near $340, up more than 22 percent for the year, according to CNBC.

Sell side sentiment leaned toward Amazon. KeyBanc analyst Justin Patterson raised his price target from $325 to $335 ahead of the release, and Goldman Sachs analyst Eric Sheridan moved to the same figure while forecasting AWS growth of about 33 percent this year and close to 35 percent in 2027, TheStreet reported. Coverage of the stock counted 79 buy ratings, four holds and no sells, with a mean target near $315. Consensus called for AWS growth of 31 percent, a bar the reported 37 percent cleared by six full points, per Yahoo Finance.

AWS Reacceleration Carries the Quarter

Amazon Web Services delivered the number the market had been waiting for. Cloud revenue rose 37 percent year over year to $42.2 billion, exceeding analyst expectations of roughly $40.5 billion and accelerating to the fastest pace in 18 quarters, according to CNBC. Segment operating income reached $16.6 billion, up from $10.2 billion a year earlier, at an operating margin near 39 percent.

Chief Executive Andy Jassy told investors that AWS's AI business and its chip business have each surpassed $25 billion in annualized revenue, a disclosure that gave analysts a firmer basis for valuing the unit's AI exposure. Advertising, Amazon's other high-margin engine, grew 26 percent to $19.8 billion.

Jassy pushed the framing further on the call, telling analysts that AWS could “very possibly be a trillion dollar annual revenue business” over time, with attractive free cash flow and returns on invested capital attached, remarks carried in AOL's coverage of the quarter. He argued the returns on Amazon's AI spending are already visible in the segment's numbers rather than promised for some later date.

Total net sales climbed 20 percent to $200.6 billion against expectations of about $196.5 billion, with North America up 16 percent and international up 15 percent. Operating income rose 43 percent to $27.5 billion.

Bottom Line Inflated by a $53 Billion Anthropic Markup

Net income of $62.6 billion, or $5.75 per diluted share, towered over the $1.82 consensus, but the gap was driven largely by a $53.4 billion pretax non-operating gain on Amazon's investment in Anthropic, tied to the AI developer's rising valuation. Stripping out that markup, the operating performance still beat handily, which is why the shares held their gains as analysts worked through the release.

Bank of America had flagged the windfall in advance, telling clients before the report that Amazon could book a sizable mark to market gain on its Anthropic holding, according to Yahoo Finance. Numbers behind the stake explain the scale: Amazon has invested $13 billion in the AI developer with capacity for up to $20 billion more, and carried the position at $74.2 billion at the end of the first quarter. Anthropic has since filed confidentially for an IPO at a reported $965 billion valuation, which Yahoo Finance calculated would lift the value of Amazon's 21 percent stake to $202.6 billion. Thursday's $53.4 billion gain, in other words, may not be the last markup this line item delivers.

Guidance kept the momentum intact. Amazon projected third quarter net sales of $197 billion to $202 billion and operating income of $22.5 billion to $26.5 billion, well above the $17.4 billion earned in the prior-year period. The company also lifted planned 2026 capital expenditures to roughly $220 billion, a figure CNBC attributed in part to surging memory chip costs across the industry.

That capex number would have frightened investors a year ago. Paired with a 37 percent AWS growth rate, it read instead as confirmation that the spending is meeting demand rather than chasing it. Shares traded near $252 in extended dealing, up roughly 7 percent from the close after an initial spike above 9 percent, according to TradingKey's post-market coverage.

Record June Quarter Meets a Cold Reception at Apple

Apple's fiscal third quarter results were, on their face, excellent. Revenue rose 16 percent to $109.4 billion, a June quarter record, with earnings per share of $2.02, up 29 percent, on net income of $29.8 billion. iPhone revenue climbed 22 percent to $54.3 billion, also a June quarter record, as the iPhone 17 family outsold expectations. Services reached $30.7 billion, up 12 percent, with paid subscriptions above 1.5 billion.

Gross margin came in at 50.1 percent, though the figure included a benefit of roughly 2 percentage points from tariff refunds. iPad was the soft spot, with revenue down 5 percent. Measured purely against consensus, Apple's print was the stronger of the two Amazon and Apple earnings beats on the top line, clearing estimates across iPhone, Mac and total revenue. None of it was enough. The stock slid about 6 percent in after-hours trading as investors focused on the outlook rather than the quarter, according to Yahoo Finance's earnings coverage.

Supply Warnings Cloud the Holiday Setup

Chief Financial Officer Kevan Parekh guided September quarter revenue growth to 9 to 11 percent, below the pace just reported, and gross margin to 47 to 48 percent, a step down from the June quarter. He warned that the impact from supply constraints on iPhone, Mac and iPad would increase significantly on a sequential basis, with foreign exchange shaving roughly 2.5 percentage points from growth, 9to5Mac reported.

Tim Cook framed the shortage as a consequence of demand outrunning the company's own planning, telling analysts, "It's not a regular supply issue. It's a demand forecast issue." Advanced chip capacity, including the memory components whose prices have been climbing across the sector, cannot be expanded on short notice, leaving Apple heading into its largest quarter unable to build every device it could sell.

For a stock priced on the reliability of its holiday quarter, that admission mattered more than the record results. Analysts' models now have to carry both a revenue ceiling imposed by supply and a margin trimmed by component costs. Parekh's specific framing, iPhone growing in the mid-teens despite constraints and services growth holding once currency effects are removed, suggests demand is not the problem. But markets discount what can be shipped, not what could be sold, and the gap between the two is widening at exactly the wrong point in Apple's calendar.

Cook Closes Out 90 Quarterly Calls

Beyond the guidance, the call itself was a milestone: Tim Cook's 90th appearance on an Apple earnings call, and his last as chief executive. “This will be my final earnings call, and John will lead these calls going forward,” Cook told analysts, per 9to5Mac, confirming that incoming chief executive John Ternus will front the quarterly sessions once he takes over on September 1. Cook, who becomes executive chairman the same day, described the handover as seamless and said he had never been more optimistic about the company's direction, AppleInsider reported.

Cook leaves the top job after 15 years with Apple valued at roughly 14 times what it was when he succeeded Steve Jobs in 2011, CNBC noted in its preview of the call. Departing on a quarter that set June records yet knocked 6 percent off the stock hands his successor an unusual inheritance: record demand, constrained supply and a market that has stopped grading Apple on its past.

Diverging Verdicts on the AI Trade

The session around the two releases framed the split. Microsoft's blowout cloud results a day earlier had already driven the Nasdaq Composite up 2.8 percent to 25,122.18, snapping a six-day losing streak, with Microsoft adding roughly $450 billion in market value in a single session, according to TheStreet. Amazon's report extended that pattern: investors are rewarding companies whose AI capital spending is visibly converting into cloud revenue growth.

Read together, the Amazon and Apple earnings expose the two ends of the AI supply chain. Apple sits on the receiving end of the same phenomenon that is enriching the cloud platforms. The infrastructure buildout that powers AWS's acceleration is absorbing the world's supply of advanced chips and memory, inflating input costs for device makers. Amazon raised capex partly because memory is more expensive; Apple's margin guidance fell partly for the same reason. One company is the buyer driving the shortage, the other is competing with it for parts.

The Amazon and Apple earnings reaction, taken together, suggests the market still wants to own the AI trade, but is becoming more selective about the transmission mechanism. Compute sellers with pricing power are being rewarded. Hardware franchises exposed to component inflation, however profitable, are being asked harder questions. With both stocks now past their reports, that distinction, not the headline beats, is what the tape carried into Friday.

Ternus Inherits the September Quarter

Calendar math now does the work. Ternus assumes the chief executive role on September 1, weeks before the fall iPhone cycle and squarely inside the quarter Parekh guided down. September quarter growth of 9 to 11 percent sits below the roughly 12 percent increase analysts had modeled, NAI 500 noted, and the constraints Cook described will bite hardest exactly as Ternus's first holiday season begins. Analysts have not abandoned the stock: consensus price targets sit near $327, per MarketBeat, and CLSA lifted its target to $330 from $265, valuing the shares at 34 times earnings, TradingView reported.

Amazon's next checkpoints are spending and delivery. Capital expenditures of roughly $220 billion this year will need matching demand every quarter to keep the market's patience, and third quarter results due in late October will show whether the 37 percent AWS pace holds. Apple's next report, Ternus's first as chief executive, follows on a similar timetable. However the next round of Amazon and Apple earnings lands, Thursday fixed the terms on which both companies will be judged: cloud growth converted from capex on one side, devices shipped against a shortage on the other.