Apple drops 7%, Amazon surges 12% after earnings
Amazon shares surged on Friday while Apple dropped as investors reacted starkly differently to their June quarter earnings reports.
Shares of Amazon were 12% higher in premarket trading, while Apple fell 7%.
Both companies reported their June quarter earnings on Thursday with Amazon impressing the market while Apple disappointed.
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, according to LSEG.
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.
Apple and Amazon shares this year.
— CNBC’s Kif Leswing contributed to this report.
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