Shares of Amazon and Apple have both been in the spotlight as investors weigh earnings momentum, product and services mix, and the durability of demand across key end markets. Amazon recently reached an all-time high after reporting strong Q2 2026 results, with market attention focused on the acceleration in Amazon Web Services and operating leverage. Apple, meanwhile, also struck a record earlier but then pulled back after its fiscal Q3 2026 earnings report, as investors digested softer-than-expected service results alongside concerns tied to China and high memory prices.
Key takeaways
- Amazon shares hit an all-time high following a strong Q2 2026 earnings report, driven by improving AWS performance and higher profitability.
- Apple shares fell after fiscal Q3 2026 earnings as service revenue and China-related figures came in below expectations.
- AWS demand remains a central catalyst for Amazon, supported by accelerating growth tied to AI infrastructure build-outs.
- Apple’s services model remains the core long-term driver, with currency headwinds cited as a likely factor behind the service miss.
- Valuation is mixed: Amazon trades at a lower forward P/E than some large retailers, while Apple’s forward valuation is higher but reflects expectations for continued compounding.
What drove Amazon’s surge
Amazon shares rose to an all-time high after the company delivered strong Q2 2026 earnings results. The market’s primary focus was profitability and momentum in Amazon Web Services, which is Amazon’s most profitable segment and continues to benefit from demand for AI infrastructure.
According to the article, AWS revenue surged 37% to $42.2 billion last quarter, signaling that demand is not only strong but also outpacing the company’s ability to expand capacity quickly. The company is spending aggressively to add capacity, and it has a reported $496 billion backlog backed by partnerships with frontier model companies Anthropic and OpenAI.
The report also highlighted guidance-related expectations from CEO Andy Jassy, who suggested this business could become a $1 trillion revenue stream. It also noted that Amazon expects it to break even on chip and networking investments within two to three years, supported by contract terms and the expected useful life of the equipment.
Investors are also paying attention to Amazon’s strategy of using custom silicon to improve economics. The article said Amazon’s Trainium AI accelerators and Graviton CPUs have expanded into a revenue-run-rate business of $25 billion, while also supporting internal cost reductions in training and inference workloads. That mix is reflected in operating leverage: AWS operating income rose 63% to $16.6 billion, according to the article.
Amazon’s broader fundamentals
Beyond cloud, the report pointed to continued strength in e-commerce. It said North American revenue increased 16% and international revenue rose 15% in the latest quarter. The article also attributed improved operating leverage to efficiency gains, including investments in robotics—where Amazon is described as the world’s largest manufacturer and operator—and to AI-driven improvements.
Another contributor cited by the article is Amazon’s digital advertising business, which it said grew 26% to $19.8 billion last quarter. Because advertising is generally viewed as a higher-margin growth lever compared with retail, investors often treat it as a sign that the company’s ecosystem monetization is deepening.
On valuation, the article said Amazon trades at a forward price-to-earnings ratio of 23 times, characterizing it as historically attractive and relatively inexpensive compared with some large retail peers such as Costco and Walmart.
Why Apple’s record faded after earnings
Apple also reached an all-time high ahead of its fiscal Q3 2026 earnings report but then fell back afterward, according to the article. The decline was tied to multiple factors, including service revenue coming in short of expectations, China results that were described as weaker than anticipated, and investor concern over the impact of high memory prices.
Still, the report suggested that the service revenue miss may be driven more by currency headwinds than by underlying weakness in demand. It said Apple’s services historically tends to grow in the mid-teens range, and therefore investors may view the quarter as less indicative of longer-term trends.
From a structural perspective, the article emphasized that Apple’s services are supported by a tightly integrated hardware-and-software ecosystem that encourages customer retention. It cited monetization channels including Apple Pay, cloud storage, commissions on app sales and subscriptions, and a search arrangement with Alphabet. The report framed this as creating a “flywheel” effect: high engagement with Apple’s ecosystem can support recurring, higher-margin services revenue.
What investors are likely watching next for Apple
On valuation, the article said Apple’s forward P/E is 32 times fiscal 2027 estimates (ending June 2027). It characterized Apple as not “cheap,” but argued that the company’s position as a leading high-end smartphone maker and its services compounding model remain the key long-term rationale for ownership.
At the same time, the report noted that China and memory prices appear to be near-term headwinds. Even when misses are potentially temporary, investors typically look for confirmation in subsequent quarters—particularly for services growth trends, regional demand in China, and whether component cost pressures ease.
For both names, investors will likely focus next on the next set of quarterly results and forward commentary that clarify the pace of demand and margin trajectory. Amazon’s near-term narrative remains anchored to AWS growth, AI infrastructure spending, and the timing of returns on compute and networking investments. Apple’s path will depend on how quickly services momentum reasserts itself after currency-driven softness, alongside evidence that China trends stabilize and memory price pressure fades.
