A light is shining on the horizon for Apple and Amazon as the tech giants add about $196 billion in market value on Friday. The higher revenue reported by Amazon and Apple in addition to Microsoft and Alphabet Inc. will be a temporary relief to the investors who are already rattled by the inflation and the downward spiral of the economy in general. The generation of high revenue is commendable given the fact that most consumers are cutting back on their spending on account of inflation and the looming cloud of recession. The small achievement is perhaps a reassurance that these companies can withstand economic tempests.
Light At The End Of The Tunnel?
Amazon’s shares witnessed a rise of 10 percent, their highlight move since February while Apple marked a 3.3 percent jump. The gains indeed reflect the best monthly performance since July 2020. Perhaps both the tech giants are ready to create new records and tackle new challenges. Because the last time Amazon marked such a surge was in July 2009, when it rose by 27 percent, its biggest.
The expansion of e-commerce and cloud computing businesses worked in favor of Amazon, opening doors to higher revenues and notable market value. The Bloomberg Intelligence analysts are of the opinion that the company is “better positioned to weather inflationary pressure and benefits from a more affluent customer contrary to Walmart.”
Apple, on the other hand, smashed the revenue expectations of the analysts. A big part was played by the rise in iPhone sales, particularly when smartphone shipments are going through a slow phase globally. Although Apple’s net income declined by 11 percent, the overall results aren’t disheartening.
According to Piper Sandler analyst, Harsh Kumar, “Apple appears to be seeing no meaningful impact on its iPhone business in the current macro environment.” The restrictions placed by China on production were a rather big roadblock. However, towards the end of the quarter, these were relaxed allowing “some pent-up demand to be met.”
