Two of the world’s largest technology companies delivered sharply divergent fortunes in after-hours trading Thursday, as Apple Inc. (AAPL) sank 6% on a weaker-than-expected revenue forecast and deepening supply constraints, while Amazon.com Inc. (AMZN) jumped 8% driven by a resurgence in its cloud business and a massive gain from its AI startup investment.
Apple’s fiscal third-quarter results, which ended June 27, handily topped Wall Street estimates. Total revenue climbed 16.4% year-over-year to $109.42 billion, while earnings per share came in at $2.02, including 11 cents from U.S. tariff refunds.
The iPhone led the strength, with sales rising 21.7% to $54.25 billion — the best third-quarter performance ever for the product line. Mac revenue surged 28.7% to $10.35 billion, far exceeding analyst projections, fueled by robust demand for both entry-level and high-end models. Wearables sales rose 6.5%, slightly ahead of consensus.
Yet the strong quarterly print failed to lift shares, as investors focused on a downbeat guidance for the current quarter ending in September and mounting supply chain risks. Apple projects revenue growth of 9% to 11%, below the 12% increase analysts had expected. iPhone revenue is on track to grow around 15%, short of the 17.6% consensus forecast, while gross margins are seen between 47% and 48%.
Apple CEO Tim Cook said the company faces “very significant supply constraints” with limited flexibility to address the shortfall. The core bottleneck is a global shortage of advanced chip manufacturing capacity, which has left Apple unable to keep pace with stronger-than-expected product demand — particularly for its Mac lineup. Memory chip supplies are also tight, a problem exacerbated by the worldwide buildout of AI data centers.
Several business lines also missed estimates in the June quarter. Services revenue grew 12.1% to $30.74 billion, falling short of analyst targets. iPad sales dropped 5.9% to $6.19 billion, below expectations. Greater China revenue rose 22.4% to $18.82 billion, trailing the average forecast compiled by some research firms.
Some analysts warn the strong quarterly sales may have pulled forward consumer demand, as shoppers rushed to buy devices ahead of expected price hikes, casting doubt on the durability of growth in the coming quarter.
In stark contrast, Amazon delivered a quarter that reignited investor confidence. The e-commerce and cloud giant posted total revenue of $200.6 billion in the second quarter, up 19.6% from a year earlier. Its bottom line got an enormous boost from a $53.4 billion pre-tax non-operating gain tied to its stake in AI startup Anthropic.
The star performer was Amazon Web Services, which notched its fastest quarterly growth in more than four years. AWS revenue jumped 36.7% to $42.2 billion, generating $16.6 billion in operating income — the company’s largest profit driver by far.
AI monetization has emerged as a key catalyst. Amazon said AWS’s AI business has surpassed a $25 billion annualized run rate, matching the scale of its custom AI chip division. During the quarter, the company signed new cloud agreements with major enterprise clients including Warner Bros. Discovery and Siemens Energy, spanning media, energy and technology sectors.
Amazon’s retail segments grew at a slower but steady pace. North American sales rose 16% to $116.2 billion, while international revenue increased 15% to $42.2 billion. While the two retail units combined roughly match AWS in revenue, their profit margins remain significantly thinner.
Analysts point to accelerating AI demand in cloud computing and the one-time investment windfall as the twin drivers behind Amazon’s post-earnings rally. Still, the company faces pressure from heavy capital spending on AI infrastructure. Free cash flow stood at negative $7.6 billion over the trailing 12 months, as massive investments in data centers continue to drain cash.
The stark divergence between the two tech bellwethers underscores a widening gap in their growth trajectories. Apple, anchored to the global hardware supply chain, is being forced to trim its growth outlook amid a shortage of advanced chip capacity. Amazon, positioned at the center of cloud computing, is seeing the AI boom translate directly into revenue and profit gains. The split in share performance is, in essence, a tale of two forces playing out this earnings season: cyclical pressure on hardware on one side, and the windfall of cloud AI growth on the other.
