Wall Street Picks AI Winners! Amazon Soars Over 13% at Open, Apple Plunges Nearly 9%

Amazon and Apple saw sharply divergent stock movements at Friday's (31st) market open, with Amazon surging over 13% and Apple plunging nearly 9%, signaling that investors are now selecting the next wave of tech stock winners based on corporate earnings and artificial intelligence (AI) strategies.

As of press time, Amazon (AMZN-US) was up 13.52% during Friday's trading session, temporarily priced at $267.34 per share; Apple (AAPL-US) was down 8.63%, trading at $304.64 per share.

Both companies released their Q2 earnings after Thursday's market close. Apple exceeded market expectations in profit, revenue, and iPhone sales, but its weak guidance for the current quarter became the primary reason for the stock sell-off.

Apple forecast revenue growth of 9% to 11% for the current quarter, below the 12% expected by analysts surveyed by LSEG. The company cited supply constraints as limiting growth, including a severe shortage of key memory components and intensifying competition for advanced chip manufacturing capacity.

Supply tightness has already prompted Apple to raise prices for Mac and iPad models, and analysts expect iPhone prices may also increase this year. Despite strong underlying demand, investors remain concerned that rising costs and supply shortages will limit Apple's short-term revenue growth.

In contrast, Amazon's cloud computing division posted a 37% year-on-year revenue increase in Q2, the fastest growth since 2021. Amazon Web Services (AWS) is the primary source of the company's AI-related revenue, and its strong performance reflects rising enterprise demand for AI products and computing resources.

Amazon also raised its capital expenditure forecast for the year from $200 billion to $220 billion, continuing to expand its AI infrastructure. While the market has recently grown concerned that large tech firms are investing faster than actual demand, AWS's high growth rate convinces investors that Amazon's massive spending will yield returns.

Tracy Woo, Chief Analyst at Forrester, stated, "AWS's strong growth clearly shows that Amazon's infrastructure investment is meeting market demand, not over-deploying ahead of need."

Amazon's stock performance has lagged this year; even including Friday's gains, it has risen only about 4% year-to-date, while Apple has gained 23% over the same period. Apple had previously been seen as an alternative to heavily AI-investing tech giants due to its lack of aggressive AI capital spending, but this advantage is now being tested by supply bottlenecks.

The stock performance of major tech firms is now clearly diverging based on AI strategy. Meta (META-US) plunged 8% on Thursday, while Microsoft (MSFT-US) surged 15%, and with Amazon and Apple showing opposing trends on Friday, it's evident that investors are no longer broadly favoring all tech stocks, but instead prioritizing whether AI spending can be converted into actual revenue and profit.