Apple and Amazon exceeded earnings expectations, highlighting strong iPhone and AWS growth amid AI investment and tariff risks.
Sectors & Industries
August 1, 2025
Table of Contents
Apple and Amazon have long been two of the most watched stocks on Wall Street. With both companies releasing their most recent earnings reports in late July 2025, investors had their eyes on how these tech titans are navigating a shifting economic landscape, rising AI investments, and looming tariff pressures. Here's a deep dive into how Apple and Amazon performed, how the market reacted, what analysts are saying, and what it all means going forward.
Apple posted a record-setting quarter, delivering $94.0 billion in revenue, up 10% year-over-year. Earnings per share (EPS) came in at $1.57, marking a 12% increase from the prior year. iPhone revenue surged 13.5% to $44.6 billion, and Services hit an all-time high of $27.4 billion. Mac sales also saw double-digit growth, while iPad and wearables experienced minor declines. Gross margin remained strong at 46.5%.
Segment Performance
Apple shares rose 2–3% in after-hours trading following the earnings release, reversing a slight drop earlier that day. Investors responded positively to the revenue beat and upbeat commentary from management.
Analysts broadly applauded Apple’s performance. Most maintained Buy ratings, with price targets averaging around $235. Some firms, like Wedbush and Goldman Sachs, raised estimates, citing iPhone strength and service growth. There were no major downgrades.
While Apple didn’t issue formal guidance, executives forecast mid-to-high single-digit revenue growth for the September quarter. They also warned of a $1.1 billion tariff headwind but noted robust underlying demand, with some customers accelerating purchases to avoid potential cost increases.
Apple has returned to growth after a flat 2023, with Q3 marking its strongest performance in years. Revenue and EPS have climbed steadily over the last three quarters, supported by strong iPhone demand and high-margin services.
Amazon reported $167.7 billion in revenue, up 13% year-over-year, with EPS of $1.68—beating Wall Street expectations. AWS revenue grew 17.5% to $30.9 billion, while ad revenue rose 22% to $15.7 billion. Operating income reached $19.2 billion, up from $14.7 billion a year ago.
Segment Performance
Despite beating estimates, Amazon stock dropped around 7% in after-hours trading. The decline was driven by cautious profit guidance and slightly underwhelming AWS growth and margins compared to cloud competitors like Microsoft and Google.
Analyst sentiment remains bullish, with all 25 analysts tracked by Visible Alpha rating the stock a Buy. Price targets average $252, with many reaffirming long-term confidence in Amazon’s AI and advertising growth, even as some trimmed short-term earnings forecasts.
Amazon guided Q3 revenue to $174–$179.5 billion (up 10–13% YoY) but projected operating income of $15.5–$20.5 billion—a wide range that skewed lower than expected. Amazon is investing heavily in AI infrastructure and fulfillment, with capex expected to exceed $100 billion for the year.
Amazon has delivered consistent ~10% revenue growth for the past year while dramatically improving profitability. Operating margins rose from ~8% in 2024 to 11% in Q2 2025. AWS growth has slowed from previous years, but advertising and core retail remain strong drivers.
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Both Apple and Amazon executed well in their respective quarters, exceeding analyst expectations. Apple’s upside surprise and improving growth trend fueled a positive investor response. Amazon’s performance was solid, but investor attention focused on cloud profitability and spending. While Apple’s current momentum favors the short-term investor, Amazon’s reinvestment story supports a long-term thesis.
Investors and traders alike should monitor future earnings closely, especially in the context of AI deployment, geopolitical trade risks, and shifting consumer behavior.
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