Apple falls 7% as Amazon jumps 12% on AI-focused earnings

Apple shares fell about 7% in premarket trading Friday while Amazon climbed roughly 12% after the two companies reported June-quarter results and investors rewarded what they called clearer AI exposures, according to market coverage and video commentary from Reuters and CNBC.

The divergence underscored how analysts and traders are sorting megacap stocks by AI traction: Amazon’s cloud business showed an acceleration that investors treated as a direct path to AI revenue, while Apple’s cautious guidance and supply worries left the iPhone maker vulnerable despite a revenue beat.

AWS growth of 37% frames Amazon’s surge

Amazon reported that revenue at Amazon Web Services grew 37% year‑on‑year in the second quarter — its fastest pace since 2021 — and said businesses running on its custom AI chips have reached a $25 billion annual run rate, data cited in market reports show. The company also raised its capital‑expenditure forecast to $220 billion for the year, up from a prior $200 billion outlook, which investors appeared willing to accept as investment in AI infrastructure rather than a profit drag.

“Shares of Amazon were 12% higher in premarket trading, while Apple fell 7%,” CNBC reported, noting that Amazon had already climbed nearly 4% at Thursday’s close before the bigger move overnight. Reuters quoted Dean Smith of FolioBeyond calling the results “really instructive for thinking about what’s happening in the AI trade right now,” a phrasing that highlights how the market is treating earnings as a proxy for AI leadership.

Apple’s guidance and services shortfall hurt sentiment

Apple topped revenue expectations for the quarter and posted a 22% rise in iPhone sales, but investors focused on the company’s current‑quarter guidance and a services revenue shortfall, alongside the risk of higher memory prices and chip constraints, CNBC’s liveblog and syndicated market coverage noted. That combination prompted a selloff that widened from a roughly 4% after‑hours decline into a steeper premarket drop of about 7% by Friday.

The market reaction illustrates an odd inversion: solid near‑term metrics did not insulate Apple from investor skepticism about forward momentum tied to AI. Analysts quoted by Yahoo Finance said Amazon’s cloud strength “helped offset fresh disappointment from Apple’s cautious outlook,” underscoring the narrow lens traders are using this quarter.

Market participants flagged two caveats. First, Reuters’ strategist Dean Smith suggested the market may be over‑differentiating winners and losers on early signals rather than durable fundamentals, implying volatility could overshoot. Second, CNBC noted that Amazon’s stock rally came even as the company forecast far higher spending, raising questions about whether investors are rewarding capex intensity before its payoff is proven.

Past moves and competitor context help explain why investors reacted so sharply. Microsoft earlier in the week rallied roughly 15% on investor optimism around its AI positioning, while Meta slid about 8% amid questions over monetising AI investments — framing Amazon’s cloud growth as the clearest near‑term revenue lever among big tech names.

The timing matters: as firms disclose June‑quarter results, the market is repricing large‑cap tech on whether AI spending translates into revenue and margin lift rather than simply higher capital outlays. Amazon’s AWS acceleration and the company’s public roll‑out of custom AI chips gave traders a concrete revenue narrative; Apple’s story remains more about hardware and ecosystem continuity than an obvious AI‑driven revenue surge.

Looking ahead, investors will watch whether Amazon’s elevated capex converts into durable margins and new enterprise contracts tied to AI workloads, and whether Apple can translate product strength into services growth and clearer AI monetisation pathways in coming quarters. Next week’s investor calls and the companies’ disclosures on AI deployments will be the immediate metrics to watch.