Amazon shares surged 12% in premarket trading Friday after AWS posted its strongest revenue growth since 2021, while Apple dropped 7% on guidance that missed analyst expectations due to memory shortages and chip supply constraints.
Investors delivered sharply divergent verdicts on two of the world's largest technology companies Friday morning, sending Amazon shares up 12% in premarket trading while Apple dropped 7%, after both companies reported June-quarter earnings on Thursday.
Amazon's climb came after its Amazon Web Services division posted revenue growth of 37% year-on-year in the second quarter — the strongest expansion for the cloud unit since 2021. AWS is the segment where Amazon books most of its AI-related sales, and investors have treated its growth rate as a proxy for how much enterprise spending on AI infrastructure is actually translating into recognized revenue.
The result appeared to resolve, at least temporarily, a question that has hung over the sector: whether Big Tech's heavy capital spending on AI is running ahead of actual demand. Amazon said it expects capital expenditures to reach $220 billion this year, up from a prior forecast of $200 billion, yet the market rewarded the increase rather than punishing it.
"AWS's strong growth is a clear indicator that its infrastructure investments are meeting market demand rather than outpacing it," Tracy Woo, principal analyst at Forrester, said in a note.
Amazon had been a relative underperformer heading into earnings, up around 4% year-to-date in 2026. Apple, by contrast, had risen 23% across the same period, in part because investors viewed the iPhone maker as a lower-risk alternative to companies burning through capital on AI buildouts.
That framing cracked on Friday. Apple's headline numbers — earnings, revenue, and iPhone sales — all came in above analyst expectations, but the company's guidance for the current quarter disappointed. Apple said it expects revenue growth of between 9% and 11% in the September quarter, below analysts' consensus estimate of 12% growth, according to LSEG.
The company attributed the weaker outlook to supply constraints, specifically a significant shortage of memory — a key component across its device lineup — as well as competition for chip manufacturing capacity. To manage margin pressure from those constraints, Apple has already raised prices on the Mac and iPad, and analysts say an iPhone price increase is likely before year-end.
The divergence between Apple and Amazon was not an isolated data point. On Thursday, Meta fell 8% while Microsoft rallied 15%, as investors took opposing views of each company's AI spending posture. The pattern reinforces the sense that this earnings season is functioning as a sorting mechanism, separating companies whose AI investments are producing measurable near-term returns from those whose outlooks are clouded by cost or supply pressures.
Apple has not pursued the kind of capital expenditure expansion that Amazon, Microsoft, and Meta have undertaken. That positioning, which had been treated as a virtue earlier in the year, became a liability in investors' eyes as AWS's numbers suggested the infrastructure buildout is generating real demand.
The memory shortage pressuring Apple's guidance is intertwined with a broader shift in the semiconductor supply chain. Demand for high-bandwidth memory and advanced DRAM from AI server builders has crowded out supply available to consumer-device manufacturers, raising costs and constraining production across the industry.
Whether Apple can resolve its supply constraints quickly enough to recover guidance in subsequent quarters, and whether Amazon's cloud growth can sustain this pace as the year progresses, will be among the more closely watched questions heading into the third quarter.
Sara Montes de Oca is the Editor in Chief of TechEchelon. Previously a correspondent and producer in Washington, D.C., covering business, finance, and politics.
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