On Friday, Amazon’s stock surged around 11%, reaching an all-time high after revealing its cloud sector experienced its strongest growth since 2022. This news eased investor fears regarding excessive spending on AI by the tech giant.
As of 10:50 a.m. ET, the Nasdaq climbed 1.2%, while the S&P 500 and Dow Jones Industrial Average rose by 0.6% and 0.3%, respectively.
On Thursday, shares of Meta and Microsoft each dropped by approximately 12% and 3%, following the announcement of increased capital expenditures aimed at AI enhancements.
Despite some fluctuations, major stock indexes are anticipated to finish the week positively.
Both the Dow and Nasdaq are poised for their longest streak of monthly gains since January 2018.
Amazon stated that the growth in cloud computing is the most robust it has seen since 2022, along with plans to expand data center capacity.
The revenue for Amazon’s cloud division increased by 20.2% in the last quarter, surpassing Wall Street’s 18.1% expectation. The company is currently a prominent player in the cloud infrastructure market.
“The demand for AI and core infrastructure remains strong, and we are dedicated to boosting capacity, having added over 3.8 gigawatts in the past year,” CEO Andy Jassy noted during the earnings call.
In terms of financials, Amazon reported earnings of $1.95 per share, beating expectations of $1.57, with sales reaching $180.17 billion—also above the predicted $177.8 billion.
For the upcoming quarter, the company projects sales between $206 billion and $213 billion, exceeding analysts’ forecasts.
Additionally, Amazon expects operating profit to range from $21 billion to $26 billion, compared to a forecast of $23.8 billion.
This week, like other major tech companies, Amazon upped its capital spending expectations for the year. The anticipated spending for 2025 is between $118 billion and $125 billion, with plans for even more in the following year.
Just recently, Amazon introduced Project Rainier, an $11 billion data center located in rural Indiana.
Yet, in a move to cut costs, the company has started reducing its workforce, announcing layoffs of 14,000 employees this week. Reports suggest a total of 30,000 employees—about 9% of its global office workforce—could be affected over the upcoming weeks.
During the earnings call, Jassy emphasized that the layoffs weren’t strictly financial decisions but rather aimed at fostering a better company culture by reducing unnecessary bureaucracy.
On the same day, Apple also reported strong quarterly results and a promising outlook heading into December.
Initially, shares increased on Friday morning but later dropped by around 0.3%, particularly as sales and profits in China didn’t meet expectations, which is a significant market for the company.
However, Apple’s earnings per share were $1.85, exceeding the predicted $1.77, while sales hit $102.47 billion, also above expectations of $102.24 billion.
For the holiday quarter, the company anticipates sales growth of 10% to 12%, well above Wall Street’s 6% forecast, as noted by Chief Financial Officer Kevan Parekh.
He expressed optimism for a “double-digit” increase in iPhone sales year-over-year to drive overall growth.
This surge is attributed to the favorable global reception of Apple’s new iPhone 17 lineup, with CEO Tim Cook mentioning a significant increase in foot traffic to stores compared to last year.
For the last quarter, Apple posted a net income of $27.46 billion, up from $14.29 billion a year earlier, which was affected by a one-time tax last year.
In total, Apple’s revenue for fiscal year 2025 reached $416 billion, a 6% rise from the prior year.
Sales during the last quarter grew by 8% compared to the same period a year earlier.
iPhone sales rose by 6% to $49.03 billion. However, as the new iPhone 17 models launched just a week before the quarterly report, analysts had projected them to be at $50.19 billion. Cook attributed the shortfall to supply constraints affecting some models.
The iPad segment saw flat sales of $6.95 billion, while revenue from Apple’s services—including iCloud and Apple Music—grew by 15% to $24.97 billion.
Sales from “other products,” incorporating Apple Watch and AirPods, slightly declined to $9.04 billion, but the Mac business increased by 13% to $8.72 billion.
On pricing, Cook mentioned that the company isn’t raising prices due to tariffs; instead, Apple is “just absorbing the tariffs through gross profits.”
Lastly, the gross profit margin was reported at 47.2%, surpassing expectations of 46.4%.
