The numbers showed that both Apple and Amazon beat top and bottom line estimates. Apple posted double-digit revenue growth across multiple products with its services businesses in particular putting up a very strong front. Revenue there totaled to $27.4 billion, a new record for the firm.
Meanwhile, Amazon revenue came in at $167.7 billion and that beat estimates of $162.1 billion with AWS revenue seen up over 17% compared to the same quarter last year.
So, what’s not to like?
As mentioned yesterday, we have to go deeper than the numbers. Apple’s earnings call wasn’t the most exciting with it being mostly about CEO Tim Cook having to try and convince that they will be a competitive player in the AI space. The growth in services revenue will at least ease concerns but tariffs impact is still notable.
The firm estimates that there will be a $1.1 billion increase in costs just from tariffs for the current quarter. And in Q2 2025, they suffered $800 million in costs on the tariffs front. As such, the headwinds won’t go away just yet.
Apple stocks have struggled this year and the latest earnings report will not do much to change that outlook I feel.
As for Amazon, they provided a wider estimate on operating income guidance for the current quarter and that might be getting investors feeling a little nervous. The firm now sees operating income around $15.5 billion and $20.5 billion for Q3 2025 and that is perhaps a sign that tariffs might come into play. For some context, the expectation was for that figure to be around $19.4 billion.
That being said, CEO Andy Jassy tried to defend their position in saying that:
“It is impossible to know what will happen (on tariffs). Where will tariffs finally settle, especially on China? What happens when we deplete the inventory we forward bought or that our selling partners forward deployed in advance of the tariffs going into effect? If costs end up being higher, who will be the ones to absorb them? But what we can share is what we’ve seen thus far, which is that through the first half of the year, we haven’t yet seen diminishing demand nor prices meaningfully appreciating.”
It’s not a popular opinion as many other firms have already noted on the need to hike prices due to tariffs. We’ll see in time if there will be a more material impact to Amazon. But for now, investors are thinking that it likely should have at least some impact.
Apple and Amazon don’t quite have as big a buffer on the AI front to play with. And as a result, they can’t look to that to overshadow the impact from tariffs as opposed to their peers.
