Amazon shares jumped 14% while Apple fell 9% on Friday, as investors picked their preferred AI stocks following Thursday's earnings from both companies. Apple beat estimates but gave weak guidance tied to a memory shortage, while Amazon's cloud unit posted its fastest revenue growth since 2021 despite higher planned spending.
Amazon shares surged 14% while Apple dropped 9% on Friday, as investors reacted to the two companies' June-quarter earnings, both reported Thursday after the bell.
Apple's guidance disappoints despite a beat
Apple's earnings, revenue and iPhone sales all topped market expectations. However, the company issued weak guidance for the current quarter, citing "supply constraints." Apple said revenue growth this quarter will land between 9% and 11%, missing analysts' expectations of 12% growth, according to LSEG.
The company is grappling with a shortage of memory, a key component in its devices, along with competition for chip manufacturing capacity. As a result, Apple has raised prices on the Mac and iPad, and analysts expect an iPhone price increase later this year.
AWS growth fuels Amazon's rally
Amazon, meanwhile, said revenue at its cloud computing business jumped 37% year-on-year in the second quarter, marking its strongest expansion since 2021. The AWS unit books most of Amazon's AI-related sales, so investors watch it closely as a gauge of AI demand.
Its shares surged even as the company forecast capital expenditures of $220 billion this year, up from a prior forecast of $200 billion, as it keeps investing in AI infrastructure. Investors have been scrutinizing Big Tech's AI spending on concerns that companies are outpacing demand, but Amazon's own cloud growth appeared to justify its capex.
Investors pick their AI winners
According to Forrester analyst Tracy Woo, AWS's growth is a sign that "infrastructure investments are meeting market demand rather than outpacing it."
Amazon's stock has lagged in 2026, up around 4% year-to-date, while Apple has risen 23% over the same period. Apple is partly viewed as an alternative trade to heavy AI spenders, as it has not gone on a large capex expansion of its own.
The divergence extended across Big Tech on Thursday, as Meta sank 8% while Microsoft rallied 15% on investors' differing views of each company's AI strategy.
Source: International: Top News And Analysis
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