Apple and Amazon to report, with AI rollout and China exposure key watchpoints
Apple is poised to release its Q2 results today, with analysts expecting modest year-on-year growth. Revenue is forecast to reach $94.2 billion – up 3.8% – while net income is projected to rise 2.5% to $24.2 billion. The services division – comprising the App Store, iCloud, and advertising – is expected to post a 12% gain and continue offsetting sluggish iPhone sales, which have been weighed down by lengthened upgrade cycles and trade-related headwinds. Gross margin is set to improve to 47.1% – reflecting strong cost control and pricing power. However, investor sentiment remains cautious, with the stock still trading 19% below its December 2024 peak following a 35% pullback.
Apple’s exposure to US–China trade tensions is under close scrutiny, as over 90% of iPhones are still assembled in China while the US remains its largest market. Tariff uncertainty and potential semiconductor export restrictions pose risks to both costs and supply chains. The tech giant is accelerating its manufacturing diversification into India and Vietnam – but this transition remains ongoing. Also under the spotlight is Apple’s AI strategy – after postponing the rollout of new Siri AI features in March, the market awaits updates on product integration and innovation.
Amazon, meanwhile, will report Q1 results with revenue expected around $144 billion and earnings per share of $0.98. Analysts will focus on profitability improvements – particularly in Amazon Web Services (AWS), the company’s high-margin cloud computing unit. AWS growth is expected to remain in the low double digits, with investor attention fixed on margins and AI adoption trends. Any commentary on AWS’s competitive positioning – especially against Microsoft and Google – will be closely examined, as will insight into corporate cloud spending patterns in a more cost-conscious environment.
Beyond AWS, Amazon’s advertising business is forecast to post another quarter of solid growth – supporting overall margins – while e-commerce performance will be analysed for signs of stabilisation in consumer spending. International expansion and operational efficiency in logistics are also top themes, with improvements in fulfilment and automation seen as key drivers of margin expansion. Investors will watch closely for updated guidance on Q2 and full-year performance – with AI strategy, capex intentions, and margin outlook all likely to shape near-term stock direction. Shares are down around 15% year-to-date, having only managed a modest rally from the April low.
