Amazon Wins Big, Apple Loses Big as Market Distinguishes Between AI Spending Proofs

On July 30, 2026, Amazon and Apple reported their quarterly earnings. Amazon's revenue jumped 20% to $200.6 billion, with operating income up 43% to $27.5 billion. AWS revenue grew 36.7%, the fastest in 18 quarters, at a 39.4% segment margin.

Apple also reported its quarterly earnings, beating on revenue and EPS, but guided September-quarter revenue below consensus due to component supply constraints and rising memory costs. Gross margin guidance fell to 47-48%, with memory accounting for the entire decline.

The market reacted differently to the two companies' reports. Amazon's stock rose almost 15% after the company increased its capital expenditure target from $200 billion to $220 billion, citing rising memory and storage costs. Apple's stock fell 9.4% on the same day, shedding roughly $475 billion in market value.

The discrepancy between the two companies' performances can be attributed to their approaches to AI spending. Amazon's increased capital expenditure is aimed at supporting its growing AI and chip businesses, which have passed a $25 billion run rate. In contrast, Apple does not disclose its AI-related capital spending, which is a fraction of what Microsoft, Alphabet, Meta, and Amazon spend.

The DRAM market, dominated by three companies - Samsung, SK Hynix, and Micron - has driven up memory prices due to high demand from hyperscalers. Apple buys the same chips as Amazon but absorbs the price rise through cost of sales, which affects its gross margin.

Nvidia is set to report its earnings on August 26, 2026, after the US market close. The company's AI-related capital spending will be under scrutiny as it faces a similar test to Amazon and Apple.