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3d ago

Apple and Amazon Navigate Tariff Pressures as Costs and Uncertainty Mount

Both tech giants beat earnings estimates but warn of significant challenges from U.S. trade policies and shifting supply chains.

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A trader works on the floor of the New York Stock Exchange on Friday, May 2, 2025.
Stocks gained on Friday and the S&P looked set to post its longest winning streak since 2004.

Overview

  • Apple reported $95.4 billion in Q2 revenue, with a $900 million tariff cost forecast and declining China sales, prompting a shift in U.S.-bound production to India and Vietnam.
  • Amazon posted $155.7 billion in Q1 net sales, with AWS growing 17% to $29.3 billion at a record 11.8% margin, but highlighted unpredictability from trade policies.
  • Apple's Services segment grew 12% to $26.7 billion, but fell slightly short of analyst expectations, while legal challenges threaten its App Store revenue model.
  • Amazon CEO Andy Jassy noted potential consumer behavior shifts akin to the pandemic era, with the company prioritizing affordability to counter tariff-driven cost pressures.
  • Both companies saw stock declines despite exceeding earnings expectations, reflecting investor concerns over macroeconomic and geopolitical headwinds.