Following Meta and Microsoft, the earnings bonanza continued for the market’s biggest players, with Apple and Amazon next on the docket. Both beat out Wall Street estimates, sloughing off any notion that tariffs could negatively impact their final Q2 results.
Record iPhone Sales
Apple beat out Wall Street estimates, hitting $1.57 earnings-per-share (compared to $1.43 expected) and revenue topped $94.04 billion (versus initial estimates of $89.53 billion). Big tech news has been mainly revolving around artificial intelligence (AI). But Apple’s earnings success was about a different AI: all iPhones. Sales of the mobile device grew 13% year-over-year, representing a 10% bump from last year. That’s the largest revenue growth since December 2021.
“It was an exceptional quarter by any measure,” Apple CEO Tim Cook told CNBC.
There were questions on whether Apple could parry the potential impacts of tariffs, especially the latest 25% on goods imported from India. The iPhone maker has been shifting more of its manufacturing operations from China to India as of late in order to sidestep geopolitical risk and higher tariffs. Thus far, it’s had no effects on iPhone sales at least for now.
Outlook Cloudy for Amazon?
Amazon was also able to top Wall Street expectations, notching $1.68 earnings per share (expected: $1.33) and revenue of $167.7 billion (expected: $162.09 billion). Sales grew by 13% year-over-year, while revenue also expanded 10% from 2024.
“Our AI progress across the board continues to improve our customer experiences, speed of innovation, operational efficiency, and business growth, and I’m excited for what lies ahead,” Amazon CEO Andy Jassy said.
What did cause some angst was a cloudier-than-expected outlook for its operating income guidance. CNBC reported that Amazon expects operating income to fall somewhere in between $15.5 and $20.5 billion. Analysts were expecting something closer to $19.5 billion so the lower end of that range was cause for concern. This could be tied to the significant investments Amazon is looking to make in its AI infrastructure buildout ($100 billion). From an analyst perspective, the payoffs from AI need to substantiate the hefty investments, and that operating income figure may not duly reflect that.
Tariffs and other factors continued to add more clouds to the forecast. The online retail giant did mention “tariff and trade policies” could affect future guidance, as well as “recessionary fears.”
Trade Both Directions With Direxion
As with the case of earnings reports, market volatility can ensue during and after market hours once announced. A positive earnings report can induce a sense of buying europhia. A sell-off can quickly ensue once traders are done with the initial profit-taking or analysts have had time to digest the numbers.
This is where it helps traders to have the ability to play the upside or downside no matter how the market reacts. That flexibility is inherent in single-stock ETFs. They provide the ability to go 2x on the bullish side. And they hedge against or profit from losses with the inverse side. With that, Direxion Investments has a full suite of single-stock ETFs feature the most tradeable names on the market.
If Apple can maintain the positive Q2 momentum and turn its year around, then the +Direxion Daily AAPL Bull 2X+ (AAPU ) is the fund to look at. If the year-to-date trend manifests itself in the short-term horizon, traders can get bearish with the Direxion Daily AAPL Bear 1X Shares (AAPD ).
Traders who think Amazon can overcome its cloudy outlook for Q3 can take the bullish side of the trade with the Direxion Daily AMZN Bull 2X Shares (AMZU ). However, if traders anticipate that in the time leading up to Q3 earnings that Amazon can’t sustain its bullish momentum, the Direxion Daily AMZN Bear 1X Shares (AMZD ) is an ideal play.
News on both companies can have a positive or negative impact on each of their stocks. But traders will always be ready with single-stock ETFs.
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