Amazon.com, Inc. (NASDAQ:AMZN) and Apple Inc. (NASDAQ:AAPL) both beat Wall Street’s revenue estimates this week, but investors could not have reacted more differently. Amazon’s stock surged as much as 15%, while Apple’s fell more than 7%, on the very same earnings day.
Why One Beat Got Rewarded and the Other Got Punished
Amazon’s cloud unit, AWS, grew 37% year over year, its fastest pace since 2021, giving investors clear proof its AI spending is starting to pay off, even as free cash flow flipped negative for the trailing 12 months. Apple Inc. (NASDAQ:AAPL) beat on revenue and iPhone sales too but gave weak guidance for the current quarter, blaming “supply constraints” from a global memory shortage, on the same call marking CEO Tim Cook’s last as chief executive.
This makes you question: Is Amazon.com, Inc. (NASDAQ:AMZN)‘s heavy AI spending actually working better than Apple’s cautious approach, or did investors just reward fast growth and punish the one with short-term bad news?
Amazon’s Bull and Bear Case
Revenue rose to $200.61 billion, beating the $196.47 billion expected, and AWS revenue hit $42.2 billion, beating estimates and growing far faster than rivals expected. Net income jumped to $62.6 billion, helped by a $53.4 billion pretax gain tied to Amazon.com, Inc. (NASDAQ:AMZN)’s stake in AI lab Anthropic, and AWS’s order backlog reached $496 billion. CEO Andy Jassy said demand already booked for 2028 is “striking.”
However, Amazon raised its 2026 capital spending plan to $220 billion, up from $200 billion, blaming rising memory chip costs, and free cash flow over the past year turned negative by $7.6 billion, down from a positive $18.2 billion a year earlier. Guidance for the current quarter, $197 billion to $202 billion, also came in below the $204.1 billion analysts wanted.
Apple’s Bull and Bear Case
Revenue rose to $109.42 billion, beating the $108.65 billion expected, and iPhone sales jumped 22% to $54.25 billion, which Cook called an “incredible blowout.” Mac sales jumped 29% to $10.35 billion on the new, cheaper MacBook Neo, and China sales rose 22% to $18.82 billion as Apple Inc. (NASDAQ:AAPL) gained smartphone market share while rivals (Samsung, Xiaomi, Vivo, and Oppo) raised prices. Apple also keeps spending far less than its peers on AI infrastructure, expecting just over $11 billion in capital spending this year.
Still, adjusted earnings per share, excluding an unusual tariff refund, came in at just $1.91, barely above the $1.89 expected, and guidance for the current quarter, 9% to 11% revenue growth, missed the 12% Wall Street wanted. The same memory shortage already forced Mac and iPad price hikes, with iPhone increases expected next. Shares fell more than 7% and stayed down through Friday’s close, a real test of the safe-haven status investors had given Apple all month.
Insider Monkey’s Hedge Fund Data
Insider Monkey’s hedge fund database shows Amazon.com, Inc. (NASDAQ:AMZN) had 353 hedge fund holders as of Q1 2026, down from 381 the quarter before. Apple had 170 holders, up slightly from 169. Amazon has more than double Apple’s hedge fund following, even after its own pullback in holder count heading into this year. Among their Magnificent Seven peers, Microsoft had 282 holders, Alphabet had 265, and Meta had 262. Apple trails every one of them.
Conclusion
Amazon won over both Wall Street and hedge funds this earnings season. Apple Inc. (NASDAQ:AAPL)’s status as a safe haven pushed its market value to $5 trillion just days ago, but Tim Cook’s final quarter as CEO brings a real test. For now, investors demand a successful next iPhone cycle before they trust Apple again.
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Disclosure: None. This article is originally published at Insider Monkey.
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