Apple and Amazon Earnings in Focus Amid Market Pressures and AI Expectations

As the tech world awaits two of the most anticipated earnings announcements this week, Apple and Amazon are firmly in the spotlight. Both companies face high investor expectations amid shifting economic dynamics and intensifying competition in the artificial intelligence (AI) space.

Apple: A Pivotal Quarter Ahead

Apple’s stock has fallen roughly 15% year-to-date, placing added importance on its upcoming earnings results. Investors are closely watching for updates on consumer demand, supply chain resilience, and the company’s approach to emerging headwinds.

One pressing concern is the new U.S. import tariffs on China-made devices, which analysts estimate could shave off approximately $900 million from Apple’s profits this quarter. To offset the impact, Apple has been accelerating its manufacturing diversification, shifting production to India and Vietnam. Additionally, Apple’s pricing power—evident in its 47% gross margin last quarter—may provide a cushion, allowing it to pass on higher costs without significantly denting demand.

Crucially, Wall Street will be listening for clarity on Apple’s AI roadmap. The company offered limited insight into generative AI at its June developer conference, raising concerns about falling behind rivals. Analysts will be eager for updates on AI integration into Siri, new on-device features, or potential AI investments. While Apple has historically adopted a privacy-first, cautious stance on AI, signs of acceleration would be a welcome signal for investors.

Josh Gilbert, Market Analyst at eToro, said: Outside of AI, product and service demand remains in focus. iPhone sales are forecast to reach around USD $47 billion, though ongoing weakness in China may weigh on performance. Meanwhile, recent launches—including the 11th-gen iPad and the new M4 MacBook Air—may drive stronger results for the Mac and iPad segments. Any updates around the upcoming iPhone 17 will also be closely monitored.

Despite current challenges, Apple remains a major player—but may no longer be the standout of the ‘Magnificent Seven’ tech stocks.

Amazon: Cloud Power and E-Commerce Resilience

Amazon’s upcoming earnings will be anchored by performance in its two core segments: Amazon Web Services (AWS) and its sprawling retail business.

AWS, Amazon’s highly profitable cloud unit, remains the engine of growth, delivering $11.5 billion in operating income last quarter with nearly 40% margins. The company’s aggressive push into AI cloud services is at the center of investor attention. CEO Andy Jassy recently described demand as “insatiable,” with the company allocating around $100 billion in capital expenditures for 2025 to expand its AI and cloud infrastructure. With Alphabet recently raising its capex, investors will be watching for a similar move from Amazon.

Management commentary on how generative AI is driving cloud usage will be critical. While early signs are encouraging, any indication of slowing growth may impact sentiment.

On the retail side, Amazon’s drive for efficiency is paying off. The company has undertaken extensive cost-cutting, laying off around 27,000 employees and restructuring its fulfillment operations. As a result, North America retail margins improved to 6.2% in Q1, up from 5.8% a year prior. Automation has been key, with over 750,000 robots now deployed across its logistics network, and further AI-driven enhancements expected to continue driving margin improvements.

Strong Prime Day results—estimated at USD $24.1 billion in U.S. online sales—suggest healthy consumer demand despite inflationary pressures. Investors will be keen to hear whether this momentum is expected to carry through the remainder of the quarter.

As the world’s largest cloud provider, Amazon must show it’s not just keeping pace in the AI race, but setting the standard.