ar
As Magnificent 7 stocks earnings continue to shape the tech space, Apple and Amazon gear up to report their Q2 earnings after the closing bell on Thursday, July 31st.
Markets expect a mix of positive and cautious results, with performance in AI innovation, growth in cloud services and supply chain management all under close monitoring from investors.
Apple: iPhone and Services Drive Growth
Wall Street Estimates
Apple is set to report its fiscal Q3 earnings, with earnings per share (EPS) estimated to come in at $1.42 per share, up 1.4% YoY, with revenue expected to come in at $89 billion, up 3.7% YoY. ⁽¹⁾
Apple has surpassed Wall Street’s expectations for 5 consecutive quarters as consumers rushed to buy its products before President Donald Trump’s tariffs could really take effect. Apple’s Q3 performance relies on iPhone sales and the expansion of its services segment.
Despite the optimism, Apple is facing supply chain issues from tariffs, underwhelming product releases, and struggles to stay in the AI race. Plus, Apple is still dealing with mounting legal cases, including a domestic antitrust lawsuit and escalating fines for its app store in the European Union.
iPhone Sales
iPhone sales have contributed 49% of net sales, which grew 1.9% YoY to $46.84 billion in the previous quarter. In China, iPhone sales rose over 8% from April to June, driven by iPhone 16 promotions, despite heavy competition from Chinese locals such as Huawei. ⁽²⁾
Apple has announced that it is closing a retail store in China for the first time, marking a notable retreat in a market where the iPhone maker is striving to revive sales. ⁽³⁾
Services Segment
Apple’s Services segment is expected to report double-digit revenues, fueled by over one billion paid subscribers from Apple TV+ and Apple Arcade. The segment is expected to report revenue of $26.96 billion, up 11.3% YoY. ⁽⁴⁾
Additional Key Factors to Watch
- Margin and EPS resilience
- CAPEX and AI strategy
- Regional performance
- Hardware sales such as Mac and iPad
- Forward guidance and commentary on tariffs
Amazon: E-commerce, AWS and AI Drivers of Growth
Wall Street Estimates
Amazon will report Q2 earnings with an expected cautious performance due to tariff impacts and uncertainty, which impacted global demand at large. Amazon is expected to report earnings per share (EPS) at $1.32 per share, up 4.7% YoY, with revenue expected to come in at $162.18 billion, up 9.5% YoY. ⁽⁵⁾
Amazon’s earnings could be influenced by many factors but overall are expected to show strong performances across its business segments, despite cautious guidance from Q1.
The e-commerce giant delivered robust sales in Q1 and has announced its plan to navigate macroeconomic headwinds such as tariffs while maintaining growth trajectories.
AWS and AI Growth
Amazon Web Services (AWS) remains a leader in the cloud computing industry. Its AI innovation is gaining strong momentum. AWS is expected to report $30.72 billion in revenue, highlighting Amazon’s ability to meet rising demand for its cloud and AI products. ⁽⁶⁾
Strong Growth in Ads and Retail
Amazon’s advertising business also continues to be a key driver for growth, with momentum driven by Amazon’s platforms like Prime Video and Twitch. The company also reached 275 million users in the US in Q1. ⁽⁷⁾
E-commerce is also proving strong due to improved networks that boosted delivery speeds and customer satisfaction. Online stores are expected to bring in $60 billion in revenue. ⁽⁸⁾
Additional Key Factors to Watch
- Global growth and new ventures
- CAPEX and innovation push
- Forward guidance
- Tariff impacts and trade developments
Bottom Line
Financial markets will be watching both Apple’s and Amazon’s earnings closely. Apple is expected to report a good performance considering tariff and regulation challenges, while Amazon is expected to report solid numbers. Both companies’ forward guidance, margins and other factors could steer sentiment and impact stock movements.
