S&P500 and Nasdaq Index: Amazon Builds on AWS — Apple Struggles to Unlock iPhone Upside

Apple Bets on iPhone Supply, Amazon Rides AWS Acceleration — Which Big Tech Buy Works Now?

Apple and Amazon both beat expectations this quarter, but their growth engines look very different. Apple is counting on iPhone 17 demand to drive a record holiday quarter — if it can ship enough. Amazon, meanwhile, is leaning into accelerating AWS growth and margin strength. For traders, the setups aren’t equally clear.

Apple’s Q1 Hinges on Execution

Apple posted Q4 EPS of $1.85 on $102.5B in revenue, narrowly beating estimates. But iPhone sales of $49B fell short of the $50.2B forecast. Cook blamed supply constraints on multiple iPhone 17 and 16 models.

Still, Apple is guiding for 10–12% revenue growth in Q1, implying ~$138B — above the $132.3B consensus. That number only holds if supply unlocks in time for December.

Services revenue rose 15% to $28.75B, maintaining gross margins above 70%. That mix shift helped lift overall gross margin to 47.2%, topping expectations. Mac sales also gained 13%, but Greater China fell 4% YoY — a notable risk if iPhone demand there is softer than Apple suggests.

Amazon’s Cloud Business Is Reaccelerating

Amazon’s Q3 was strong: $1.95 EPS vs. $1.57 expected, on $180.2B in revenue. AWS delivered $33B, growing 20.2% YoY — a 270bp acceleration from Q2. AWS makes up just 15% of revenue but generated two-thirds of operating profit. That margin leverage is the story.

Advertising came in strong at $17.7B, while Q4 revenue guidance ($206B–$213B) was slightly below consensus, reflecting retail caution. But with AWS driving profits, investors looked past it.

AI Is a Long-Term Play, Not a Fix

Amazon’s $11B Project Rainier — a dedicated AI data center for Anthropic — marks an aggressive swing at owning GenAI infrastructure. It’s a forward-looking bet, not a catch-up move. A recent AWS outage didn’t shake confidence, with traders staying focused on growth.

Trade Call: Amazon Is the Cleaner Buy

Apple’s setup is binary: if iPhone 17 supply unlocks, the stock works. If not, Services won’t carry the multiple. Wait for confirmation before buying.

Amazon has clearer momentum. AWS acceleration and margin strength give the stock a floor, with AI upside building. Unless cloud growth cracks, Amazon is the stronger tactical buy.

Bottom line: Apple still has to deliver — literally.