It looked as though Friday would be a quiet day for the stock market, at least based on premarket moves in major stock index futures. Small moves ruled the day, with futures on the Dow Jones Industrial Average (^DJI 0.40%) moving slightly higher along with other indexes.
Yet there were plenty of big moves among key individual stocks. Investors had looked forward all week to what tech giants Amazon (AMZN 3.43%) and Apple (AAPL -0.35%) would say in their latest financial reports. For those keeping score, Amazon was able to deliver everything investors wanted to see and then some, while Apple kept its shareholders somewhat nervous about what the next chapter for the iPhone maker will look like.
Amazing gains for Amazon
Shares of Amazon jumped 8% in premarket trading Friday morning. The e-commerce giant and cloud infrastructure services provider reported strong second-quarter financial results that affirmed its ability to keep growing even under the challenging macroeconomic conditions that consumers face right now.
Amazon's latest numbers highlighted its growth potential. Sales were up 11% year over year to $134.4 billion, outpacing calls from those following the stock for roughly 8% gains on the top line. Net income of $6.75 billion reversed a loss in the year-earlier period, and adjusted earnings of $0.65 per share were substantially higher than the $0.35-per-share consensus forecast among investors.
Both parts of Amazon's business showed encouraging signs. Sales for both the North American and international divisions of Amazon's e-commerce business were up double-digit percentages, showing the resilience of consumers even as high inflation has hurt their ability to spend on discretionary items. Meanwhile, the Amazon Web Services segment reported a 12% rise in revenue, lifted in part by the numerous applications that the company is providing its clients to assist in their efforts to use generative AI and other cutting-edge technology.
Investors have been concerned that a sluggish consumer economy could hurt Amazon. However, its guidance for sales growth of 9% to 13% in the third quarter and a substantial jump in operating income to between $5.5 billion and $8.5 billion bodes well for Amazon's prospects in both e-commerce and the cloud.
Apple falls from the tree
Things weren't as favorable for Apple, whose shares were down 3% in premarket trading Friday morning. The consumer electronics giant reported fiscal third-quarter results for the period ended June 30 that staved off the worst fears of shareholders but nevertheless left some questions unanswered.
Apple's financials were mixed. Sales of $81.8 billion were down slightly more than 1% year over year but didn't decline as much as some had projected. Net income of $19.9 billion rose 2% from year-ago levels, however, and adjusted earnings of $1.26 per share topped the consensus forecast among those following the stock by $0.07.
Apple got different levels of performance from various parts of its business. Revenue from iPhone sales fell short of forecasts, and a big drop in iPad revenue weighed on Apple's entire product line. However, services revenue of $21.2 billion was better than most had expected, and Apple reported that it had hit the 1 billion subscriber mark for its various service offerings.
Unlike many of its peers, Apple hasn't yet taken high-profile steps to rein in costs, and the rise in operating expenses during the quarter highlighted ongoing concerns about where the next phase of Apple's growth will come from. Artificial intelligence is an obvious place for exploration, but at least for now, Apple appears to be letting its rivals take the lead while keeping its own development behind the curtain.
