---
title: "Apple down 7%, Amazon up 12%: In this earnings season, faith in AI hasn't cooled down, it's just no longer unconditional."
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/43150584.md"
description: "Over the past few days, several US tech giants have released their earnings reports, but market reactions have shown a clear divergence: Apple's stock price plummeted by over 8% at one point after its earnings report, ultimately closing down about 7%; in contrast, Amazon surged by more than 12% in pre-market trading after its earnings; Microsoft was even more dramatic, surging over 15% in a single day after its earnings, marking its best single-day performance since 2008. All three companies are riding this AI wave, yet the results are worlds apart. Today, let's chat about why Apple is not favored by the market, while Amazon and Microsoft are being sought after. Apple: The numbers on paper aren't bad..."
datetime: "2026-08-03T08:58:24.000Z"
locales:
  - [en](https://longbridge.com/en/topics/43150584.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/43150584.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/43150584.md)
author: "[William聊股](https://longbridge.com/en/profiles/2064581653212868608.md)"
---

# Apple down 7%, Amazon up 12%: In this earnings season, faith in AI hasn't cooled down, it's just no longer unconditional.

Over the past few days, several US tech giants have released their earnings reports in quick succession, yet market reactions have shown a clear divergence: Apple's stock price plummeted by over 8% at one point after its earnings report, ultimately closing down about 7%; in contrast, Amazon surged by more than 12% in pre-market trading following its report; Microsoft was even more dramatic, surging over 15% in a single day after its earnings, marking its best single-day performance since 2008. All three companies are riding this wave of AI, but the results are worlds apart.

Today, let's discuss: Why is Apple not favored by the market, and why are Amazon and Microsoft being so enthusiastically embraced?

**Apple: The numbers on paper aren't bad, but only one of the three legs supporting its story is walking**

To clarify first: Apple's core business in this earnings report is actually not bad. iPhone revenue grew 22% year-over-year to a historic high of $54.3 billion, Mac revenue grew 逆势 (against the trend) by 29% despite supply chain constraints, and revenue in almost every regional market hit quarterly records. Active device base and replacement user counts also both hit new highs. What truly disappointed the market were two other things.

**The growth rate of the Services business has dropped to its lowest point in over three years.** Service business revenue in the June quarter grew 12% year-over-year, below the market expectation of 14.6%; guidance for the next quarter further suggests that growth will slow down to approximately 9.5%, the first time it has fallen below 10% since mid-2023. Morgan Stanley points out that besides the drag from exchange rates, the App Store itself has faced multiple issues such as weak mobile gaming, adjustments to business models in certain markets, and litigation impacts—some analysts even raised an interesting speculation: Could part of the weakness in the App Store be "stolen" by AI itself? For example, users spending time previously spent on apps on AI chat tools and AI assistants.

**Looking deeper, Apple is currently the most asymmetric among these giants regarding "AI risk" and "AI rewards."\*\* Microsoft's paid seats for Copilot have already broken through 30 million, representing visible and calculable AI revenue; Amazon's annualized AI-related revenue has also exceeded $25 billion. In contrast, regarding Apple's Siri AI, according to Morgan Stanley's original words, the company itself admits that "both computing power costs and revenue opportunities are still in the early stages and unclear." That is to say, if the previous speculation about "AI stealing App Store time" holds true, Apple's current situation is: it is already bearing the disruptive impact brought by AI (service revenue being diverted), but has not yet been able to receive any clearly identifiable incremental income from AI like Microsoft and Amazon—this is likely the deepest reason why the market treated Apple differently from the other two in this round of earnings reports, rather than just short-term disturbances like memory costs or supply chains.**

****Guidance for the next quarter is conservative due to chip shortages, not lack of demand.\*\* Apple's revenue guidance for the September quarter is a year-over-year increase of 9% to 11%, lower than the market expectation of 12.1%. However, management explained clearly that this is not because demand has problems, but because the supply of advanced process chips cannot keep up—here, "advanced process" refers to more precise chip manufacturing processes like 3-nanometer, which have slower yield ramp-ups, and is the technology node commonly adopted for the core chips of iPhones and Macs. The supply chain's "flexibility is worse than usual," causing restrictions across the iPhone, Mac, and iPad product lines. In other words, what the market wants to buy is more than what Apple can supply, which should ideally be good news, but in the short term, it indeed suppresses revenue growth.****

******Gross margin has been eaten away significantly by memory costs.\*\* In the gross margin guidance for the September quarter, the actual level excluding tariff refund impacts is approximately 46.5%, narrowing by 150 basis points quarter-on-quarter, whereas the historical seasonal pattern for the same period is usually flat or increasing by 50 basis points quarter-on-quarter. Morgan Stanley calculated that the rise in memory costs alone contributed to more than 100% of the quarter-on-quarter narrowing of the gross margin this quarter. Even though Apple found hedging space in non-memory costs and product structure, it couldn't completely offset it. This aligns perfectly with the main theme of global storage chip price hikes and tight supply seen repeatedly during this period—Apple has been genuinely affected by this main theme.******

******It is worth mentioning that the conclusions of these two reports from Morgan Stanley and Bank of America are actually not pessimistic: Morgan Stanley slightly lowered its target price from $364 to $360 but maintained its "Overweight" rating; Bank of America maintained its "Buy" rating and $380 target price unchanged, believing that the weakness in the September quarter is essentially a supply issue rather than a demand issue, and Apple can still improve gross margins in Q4 through iPhone price hikes and new product launches. The common logic of both institutions is: historically, Apple's stock price would only see significant valuation expansion when all three legs—iPhone, Services, and Gross Margin—were moving in a positive direction simultaneously. This time, at least two legs (Services, Gross Margin) have temporarily faltered, so before the next real catalyst (September new product launch, Autumn Siri AI rollout), the stock price is likely to remain soft.******

********Amazon and Microsoft: Why does the market accept buying in when both are burning money on AI?********

****If Apple's problem lies in "old businesses being dragged down by new variables," then what Amazon and Microsoft demonstrate is exactly the other side the market currently wants to see most: AI capital expenditures are turning into tangible revenue and profit, rather than just a cost hole that keeps growing.****

******The core highlight for Amazon is that three indicators for AWS are improving simultaneously.\*\* AWS revenue grew 36.8% year-over-year, marking the fifth consecutive quarter of acceleration, and the fastest growth rate in 18 quarters; excluding one-time energy contract gains, operating profit margin remained at approximately 38%, up 5.2 percentage points year-over-year; backlog orders (i.e., signed contracts not yet recognized as revenue, equivalent to "pre-orders" for future revenue) increased significantly by $132 billion quarter-on-quarter to approximately $496 billion, effectively providing a high-certainty insurance policy for future revenue. Meanwhile, annualized AI-related revenue has exceeded $25 billion, and annualized revenue from self-developed chips (Trainium, Graviton, AI inference and general-purpose computing chips designed by Amazon itself) also exceeds $25 billion, with triple-digit growth.******

********The market is willing to accept upward revisions in capital expenditure and negative free cash flow in the current quarter, primarily because this money is spent with a "visible direction."\*\* Amazon raised its full-year capital expenditure guidance from approximately $200 billion to approximately $220 billion (a year-over-year increase of about 71%). Looking at this number alone, it might easily be interpreted as "uncontrolled burning of money," but breaking it down, this money is mainly invested in AWS's AI computing power and self-developed chips—the two specific businesses mentioned earlier that can already generate annualized revenues in the $25 billion range—rather than vague generalized expansion. More importantly, this investment has received triple validation: growth is accelerating (AWS accelerated for 5 consecutive quarters), profit margins are improving (+5.2 percentage points year-over-year), and orders are thickening (+$132 billion quarter-on-quarter). All three indicators are indispensable—if there is only growth without profit margins, it would be questioned as "increasing revenue without increasing profits"; if there are only profit margins without orders, it would be questioned as "lacking follow-up strength." The simultaneous realization of all three is the fundamental reason why the market re-priced this round of capital expenditure increases from "risk" to "certainty." This earnings report pushed the debate of "whether AI actually has demand" directly into a new stage: "when will investments turn into real free cash flow."********

********Microsoft's logic is highly similar.\*\* Azure cloud service revenue growth accelerated by 4 percentage points quarter-on-quarter to 43%, exceeding the 39% to 40% guidance provided by management itself by 3 percentage points; M365 Copilot paid seats broke through 30 million, with a net quarter-on-quarter increase of about 10 million, far exceeding the market expectation of around 6 million. More critically, this growth did not come at the expense of profit margins—gross margin was 67.2% and operating profit margin was 45.1%, both higher than market expectations, and capital expenditure did not show the significant unexpected surge that worried the market. Growth acceleration, rising profit margins, and controllable capital expenditure happening simultaneously are also the core reasons why Microsoft achieved its best single-day gain since 2008 this time.********

********What does this divergence indicate: Valuation logic is undergoing a generational shift********

****Viewing the three companies together, behind this divergence is actually a shift in pricing paradigm: the market is switching from "AI concept premium" to "AI cash flow realization premium." For a period of time, as long as a business touched upon AI and capital expenditures surged, the stock price was likely to be rewarded. This is the "concept premium"—buying stories and imagination space. But in this earnings season, the surge in Amazon and Microsoft relied not on the statement "we are investing in AI" itself, but on the simultaneous realization of three specific indicators: growth, profit margins, and orders. It is a verification of real cash flow. This is the "cash flow realization premium"—buying specific numbers that can already be broken down and verified.****

****This paradigm shift has also redrawn a new grouping line: Microsoft and Amazon have already translated AI investments into quantifiable revenue and profit margin improvements, belonging to the companies running ahead in the "new paradigm." The problems exposed by Apple this time are essentially not that its AI story wasn't told well enough, but that it hasn't yet found its own AI cash flow curve—the weakness in services, the squeeze from memory costs, these short-term disturbances, combined with the deeper structural issue of "having no AI incremental revenue while potentially being diverted by AI," keep Apple temporarily within the old paradigm, valuing based on hardware replacement cycles and subscription services logic, without having truly entered the new track of "AI cash flow." As for the clue of rising memory costs, it is not just trouble for Apple alone—from upstream companies like ChangXin Memory Technologies and SK Hynix to terminal brands like Apple, the tight supply of storage chips has become a common variable running through the entire industry chain, affecting a wider range than imagined.****

******Several points to watch next******

******Apple:** The new product launch event in early September (iPhone 18/foldable screen, including pricing information), the official rollout of Autumn Siri AI, and whether rising memory costs will continue to suppress gross margins until fiscal year 2027 are key windows for judging whether Apple's current weakness is short-term noise or a trend 性问题。****

******Amazon and Microsoft:** In the coming quarters, as long as the growth rate of capital expenditure can still be matched by improvements in revenue and profit margins, the market is likely to continue showing patience; but if one day growth starts to slow down while capital expenditure continues to surge, the current tolerance for "burning money being accepted" may reverse quickly.****

****Personal market observation，不构成投资建议 (does not constitute investment advice). Financial data, ratings, and target prices in the article are opinions of relevant institutions as of the date of the research report release, and may change with market fluctuations. Markets carry risks, and decisions require independent judgment.****

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## Comments (1)

- **不赌就是赢 · 2026-08-03T11:14:41.000Z · 👍 1**: Very professional analysis. To sum it up, Apple has risen too much, while Microsoft and Amazon have fallen too much, so they need to balance out.