Amazon and Apple reported their June quarter earnings on Thursday, leading to divergent performance in premarket trading on Friday. Amazon shares rose 12%, while Apple shares fell 7%.
Amazon's stock surge followed its earnings report, driven largely by its cloud computing business. Amazon Web Services (AWS), the unit where the company books most of its sales related to AI, saw revenue jump 37% year-on-year in the second quarter. This growth marks the unit's strongest expansion since 2021.
Revenue growth for Amazon's cloud computing business in the second quarter.
Apple's earnings, revenue, and iPhone sales were above market expectations. However, the company issued weak guidance for the current quarter, citing 'supply constraints.'
Supply constraints
Apple projected revenue growth for the current quarter to be between 9% and 11%. This guidance missed LSEG analysts' expectations of 12% growth. The company is experiencing a shortage of memory and competition for chip manufacturing capacity.
Apple has raised prices on the Mac and iPad, and analysts expect an iPhone price rise to occur this year.
The stock movements impacted broader markets. Amazon's surge in stock price offset Apple's decline, causing the Nasdaq to open higher. The Dow rose, while Apple's stock declined due to its weak forecast.