The quarterly results came out after Thursday's closing bell. The core of the split is artificial intelligence: Amazon is spending heavily to build out AI infrastructure, and investors rewarded that bet. Apple is running into supply problems that are slowing it down, and investors punished that news.
The gap shows up in the yearly scoreboard too. Apple is still up 23% for the year. Amazon is up around 4%.
These moves fit the earnings-season pattern: AI infrastructure providers are being rewarded, while device makers are being squeezed by the same AI boom. That is why Amazon's spending plans were cheered and Apple's supply warning was treated as a red flag.
Apple beat consensus forecasts in the June quarter. Earnings, revenue, and iPhone sales all came in higher than analysts had predicted. Then Apple gave Wall Street a look at the current quarter, and the mood changed.
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Apple attributed its softer guidance to supply constraints, including tight component availability and limits on factory output. It is dealing with a severe memory shortage and tough competition for chip manufacturing capacity. That has forced Apple to bump up prices on Macs and iPads, and analysts predict an iPhone price increase later this year.
The supply squeeze shows how AI-driven demand for components is reaching beyond data centers into consumer devices. Memory chips and advanced fabrication capacity are being pulled toward the AI buildout, leaving Apple and other hardware makers competing for the same scarce inputs. Apple's 9%-11% growth forecast for the current quarter, below the 12% analysts expected, suggests shortages are the main risk right now.
Investors pay especially close attention to Amazon Web Services (AWS) because that unit generates the bulk of Amazon's AI-related sales. The segment is seen as a gauge of how much demand Amazon is capturing for its artificial-intelligence offerings.
Wall Street has been watching Big Tech's AI outlays closely, worried that companies may be investing faster than actual demand. Amazon's cloud acceleration, however, seemed to validate its spending. Forrester principal analyst Tracy Woo said in a Thursday note that the AWS acceleration "is a clear indicator that its infrastructure investments are meeting market demand rather than outpacing it."
The company is pouring money into data centers and AI compute capacity, and the 37% jump in AWS revenue in the second quarter appeared to justify the company's capex.
The iPhone maker is viewed, in part, as a contrast to the heavy spenders in tech, because Apple has avoided a huge capex push.
This earnings season shows investors choosing their preferred AI plays, as the share-price moves of large technology companies diverge. Thursday brought more of the same: Meta fell 8%, and Microsoft gained 15%, as investors read their AI strategies differently.
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