Tech giants Apple and Amazon have defied industry predictions with better-than-expected financial results.
Apple’s success is largely thanks to record-breaking iPhone sales, while Amazon’s is down to cloud computing arm Amazon Web Services (AWS), in spite of last week’s outage which knocked out thousands of websites.
AWS revenue accelerated 20.2% to $33bn (almost £25bn), which CEO Andy Jassy said was a pace it hadn’t seen since 2022. AWS accounts for 60% of Amazon’s total operating income.
Cloud growth has been a key focus for the company in the face of ever-growing pressure from rivals Google and Microsoft, which also reported revenue leaps this week.
iPhone on the charge
With Donald Trump introducing punishing tariffs on India and China – the main manufacturing hubs for the iPhone – Apple’s record revenue has been even more welcome for boss Tim Cook.
The tariffs cost Apple $1.1bn (£824m) during the past quarter and are expected to cost another $1.4bn (just over £1bn) during the final three months of the year, but the new iPhone 17 range is a hit.
Consumers have been won over by a price point that didn’t stray above last year’s model, particularly in the US and Europe, leading to sales totalling $49bn (£36.1bn) during the July-September period – 6% up on last year.
Global market analyst IDC says almost 59 million iPhones were sold worldwide in the July-September quarter, putting Apple second behind Samsung at 61.4 million of their Android-powered phones.
Buoyed by the iPhone results, Apple earned $27.5bn (£21.4bn), or $1.85 per share (£1.44), nearly doubling its profit from a year ago. Revenue climbed 8% from a year ago to $102.5bn (£80bn).
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Wall Street analysts had been cautious about both companies, and their tech rivals, because of uncertainty caused by tariffs and whether investment in AI has been overplayed.
While welcoming its latest results, Amazon has issued a cautious sales outlook for the fiscal fourth quarter, citing continued Trump tariffs as a possible bump in the revenue road.
Companies, including Amazon, are introducing AI into nearly every facet of their operations in hopes of reducing costs and boosting productivity. There have been tens of thousands of job losses at US tech firms this year.
On Wednesday, Federal Reserve Chair Jerome Powell said he did not believe the AI boom was a speculative bubble like the dot-com era, when many companies were “ideas rather than businesses”.
Today’s AI leaders “actually have earnings,” he said.
