Tech giants Apple and Amazon delivered better-than-expected quarterly earnings this week, showcasing resilient growth despite ongoing challenges from tariffs and intensifying competition in artificial intelligence. Both companies beat Wall Street estimates but revealed underlying concerns that tempered investor enthusiasm.
Apple’s Record-Breaking Quarter
Apple reported exceptional third-quarter fiscal 2025 results on Thursday, with revenue surging 10% year-over-year to $94 billion, marking the company’s largest quarterly revenue growth since December 2021. The iPhone maker posted earnings per share of $1.57, significantly exceeding analysts’ expectations of $1.43.
“Today Apple is proud to report a June quarter revenue record with double-digit growth in iPhone, Mac, and Services and growth around the world, in every geographic segment,” said CEO Tim Cook during the earnings call.
Key Apple Q3 Highlights:
- iPhone Revenue: $44.58 billion (up 13% YoY) vs. $40.22 billion expected
- Mac Revenue: $8.05 billion (up 15% YoY) vs. $7.26 billion expected
- Services Revenue: $27.42 billion (up 13% YoY) vs. $26.80 billion expected
- China Sales: $15.37 billion (up 4% YoY), beating expectations
- Gross Margin: 46.5% vs. 45.9% expected
The standout performer was the iPhone business, with Cook revealing that the iPhone 16 models showed “strong double-digit” growth compared to their predecessors. The company also reached a milestone, shipping its 3 billionth iPhone during the quarter.
However, not all product lines performed equally well. iPad revenue fell to $6.58 billion, missing expectations of $7.24 billion, while the wearables division also saw a year-over-year decline to $7.40 billion.
Amazon’s Mixed Results Spark Concerns
Amazon reported second-quarter results that exceeded expectations but disappointed investors with lighter-than-expected operating income guidance. The e-commerce giant posted earnings per share of $1.68, beating the $1.33 estimate, while revenue reached $167.7 billion, surpassing the $162.09 billion forecast.
Amazon Q2 Performance Breakdown:
- AWS Revenue: $30.87 billion (up 18% YoY) vs. $30.8 billion expected
- Online Stores: $61.5 billion (up 11% YoY) vs. $59 billion expected
- Advertising: $15.7 billion vs. $14.9 billion expected
- Seller Services: $40.3 billion (up 11% YoY) vs. $38.7 billion expected
Despite the strong numbers, Amazon shares slid more than 7% in after-hours trading as the company provided cautious guidance for the third quarter, projecting operating income between $15.5 billion and $20 billion. CEO Andy Jassy attempted to reassure investors about AWS’s “pretty significant” leadership position in cloud computing.
AI Investments and Competition
Both companies are heavily investing in artificial intelligence capabilities. Amazon has committed to spending up to $100 billion this year on AI infrastructure, including data centers and software development. Meanwhile, Apple faces criticism for its slower AI rollout compared to competitors.
Cook hinted at potential acquisitions, stating Apple is “open to M&A that accelerates our roadmap” and confirmed the company would “significantly grow” its AI investments. Industry analysts have suggested Apple should consider acquiring AI startups to catch up with rivals.
Tariff Impact and Future Outlook
Tariff concerns loomed large in both earnings reports. Apple incurred $800 million in tariff costs during Q3, lower than its initial $900 million estimate. Looking ahead, Cook warned that tariff costs could reach $1.1 billion in the September quarter if policies remain unchanged.
Amazon similarly cited “tariff and trade policies” and “recessionary fears” as factors that could affect future guidance. However, Jassy noted that tariffs haven’t significantly dented demand or driven up prices so far this year.
Looking Ahead
For the upcoming quarter, Apple expects mid- to high-single-digit revenue growth with gross margins between 46% and 47%, including tariff impacts. The company’s services segment faces a potential $20 billion threat if a federal judge rules against Google’s exclusivity deals in an ongoing antitrust case.
Amazon forecast third-quarter revenue between $174 billion and $179.5 billion, representing 10% to 13% year-over-year growth. The company’s cloud division, while still growing, showed signs of deceleration with three consecutive quarters of revenue misses.
Both tech giants demonstrate resilience in navigating a complex landscape of regulatory challenges, AI competition, and economic uncertainty. However, investors remain cautious about the sustainability of growth amid these headwinds, particularly as the companies face increasing pressure to deliver returns on their massive AI investments.
