At the end of a mixed fortnight\u2019s worth of trading updates from the US tech giants, it was down to the biggest of them \u2013 Apple \u2013 to lift investor spirits.<\/p>\n
The $3.35trn (\u00a32.63trn) giant, established again in June as the world\u2019s biggest company after five months during which Microsoft <\/strong>was bigger, reported sales of $85.78bn (\u00a367.32bn) for the three months to the end of June.<\/p>\n That was up by just under 5% on the same period last year and was also ahead of the $84.53bn (\u00a366.34bn) Wall Street had been expecting.<\/p>\n Money latest \u2013 follow for updates<\/strong><\/p>\n Crucially, iPhone sales, which make up almost half of Apple\u2019s <\/strong>revenues, also came in ahead of expectations, at $39.3bn (\u00a330.84bn).<\/p>\n That was down by 0.9% on the same period last year, but better than the 2.2% decline that had been expected.<\/p>\n That will be seen as quite a resilient showing \u2013 it was certainly better than Apple\u2019s own management had expected \u2013 in view of the fact that Apple is about to launch the iPhone 16 in September and so some customers will have been holding back from replacing their existing device.<\/p>\n The next version is expected to contain more new features supported by artificial intelligence.<\/p>\n Dan Ives, managing director at Wedbush Securities and one of Wall Street\u2019s best-known tech watchers, has estimated that some 270 million iPhone users have not upgraded their device in the last four years \u2013 potentially making this the most important iPhone launch in many years.<\/p>\n Among other stand-outs in the latest numbers was the performance of Apple\u2019s services business, which includes its app store, Apple Pay, Apple Music, iCloud and the Apple TV+ streaming service, which achieved sales of $24.2bn during the quarter \u2013 some 15% up on the same period last year.<\/p>\n \u2018Consistent growth\u2019<\/strong><\/p>\n Antonio Ernesto Di Giacomo, senior market analyst at the trading platform XS.com, said: \u201cThis segment includes services\u2026 which have shown consistent growth and have become essential for the company\u2019s revenue diversification.<\/p>\n \u201cThe increase in this area reflects Apple\u2019s strategy to expand its service ecosystem and build customer loyalty with an integrated and varied offering.\u201d<\/p>\n Another surprise in the numbers was how well the iPad \u2013 sometimes unfairly seen as something of a Cinderella product compared with the flagship iPhone \u2013 fared during the quarter.<\/p>\n Sales rose by 24%, to $7.2bn, following new product launches in May.<\/p>\n Blemish<\/strong><\/p>\n If there was a blemish in the results, it was probably in Greater China, Apple\u2019s third-largest market after the Americas and Europe.<\/p>\n Sales there came in at $14.72bn, down 6% on the same period a year ago, reflecting tough competition from local rival Huawei, whose foldable smartphones and devices have been lapped up by Chinese consumers.<\/p>\n Apple has been forced into offering price cuts in the country to compete with its cheaper rival.<\/p>\n If Apple brought a smile to the faces of tech investors, Amazon <\/strong>did the opposite, with its sales for the quarter coming in below Wall Street expectations for the first time since October 2022.<\/p>\n Shares of Amazon fell by 8% in after-hours trading after sales for the three months to the end of June came in at $147.98bn \u2013 which was up 10% on the same period a year ago but $580m lower than Wall Street had been expecting.<\/p>\n Viewed in isolation, the numbers were not too bad, but what appears to have hurt Amazon was that expectations were very high \u2013 with the shares having risen by 20% so far this year going into the results.<\/p>\n Accordingly, even though sales at the company\u2019s closely-watched cloud division, Amazon Web Services (AWS), were up 19% to $26.3bn, this was seen as a somewhat lacklustre display compared with rivals.<\/p>\n Slowdown<\/strong><\/p>\n Microsoft\u2019s Azure platform, for example, reported 29% growth during the quarter on Tuesday evening \u2013 although, at the time, that had been seen as disappointing as it represented a slowdown from the 31% growth seen during the previous quarter.<\/p>\n Meanwhile, although sales in Amazon\u2019s core e-commerce business were up \u2013 the company\u2019s largest segment, online stores, rose 5% to $55.4bn \u2013 this was also seen as somewhat disappointing.<\/p>\n Investors fear the business is facing intensified competition from Chinese competitors such as Shein <\/strong>and Temu.<\/p>\n Also disappointing was the guidance for the next quarter which, again, came in shy of expectations.<\/p>\n AI investment jitters<\/strong><\/p>\n The crux of the problem for companies like Amazon is that, while they are now investing heavily in AI, investors are becoming increasingly worried about the sums being deployed and focusing increasingly on the returns being generated by that investment in a way they were not just a few months ago.<\/p>\n That was also at the heart of the huge after-hours sell-off in Intel \u2013 which saw the chipmaker\u2019s shares fall by 21.5%.<\/p>\n Pat Gelsinger, the chief executive, announced plans to save $10bn through a variety of measures, including scrapping the company\u2019s dividend, slashing investment and cutting Intel\u2019s global workforce by 15%, around 17,500 jobs.<\/p>\n Rivals<\/strong><\/p>\n Intel has faced tough comparisons with rivals including Nvidia, which is seen as leading the way in AI chips, and with Advanced Micro Devices, to which it has been losing market share in traditional chips.<\/p>\n It all completed a rather mixed reporting season for the tech giants.<\/p>\n Of the so-called \u201cmagnificent seven\u201d, Apple, Alphabet and Meta platforms surprised to the upside while Microsoft, Amazon and Tesla <\/strong>proved slightly disappointing.<\/p>\n Attention now returns to Nvidia <\/strong>which publishes its next results \u2013 for the quarter to 28 July \u2013 on 28 August.<\/p>\n<\/p>\n At the end of a mixed fortnight\u2019s worth of trading updates from the US 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