Apple and Amazon Earnings Amid Tariff Uncertainty

Apple and Amazon reported earnings that beat expectations, but had underlying weaknesses, such as Apple's Services division missing estimates and Amazon's cloud division slowing in growth. Despite this, U.S. stocks rose, driven by gains in Meta and Microsoft, which rekindled enthusiasm for artificial intelligence. CEOs of both Apple and Amazon cited uncertainty around tariffs as a challenge. The U.S. Chamber of Commerce urged the Trump administration to implement a "tariff exclusion process" for small business importers. Nvidia CEO Jensen Huang received a 49% salary increase to $1.5 million, with total pay rising to $49.9 million.

Apple reported solid quarterly numbers, with revenue rising 5% year over year to $95.4 billion and earnings per share increasing by 8% to $1.65, beating estimates. However, a small miss on services revenue, which came in at $26.65 billion versus the expected $26.7 billion, caused the stock to drop roughly 4% in after-hours trading. Despite this, services sales grew 11.6%, and iPhone sales increased 2% to $46.84 billion, exceeding estimates. Apple's CEO, Tim Cook, highlighted that iPhones were the top-selling device in urban China and that the company is diversifying its supply chain, with most iPhones sold in the U.S. in the June quarter expected to be shipped from India.

Apple will no longer manufacture iPhones sold in the US in China due to the impact of Donald Trump's tariffs, instead sourcing most iPhones from India and iPads from Vietnam to prevent price rises. The company's CEO, Tim Cook, expects the tariffs to add £677m in costs during the current quarter. Despite this, Apple's revenue for January to March stood at £71.8bn, beating analyst expectations, potentially driven by US shoppers rushing to make purchases before the tariffs came into force.