The tech giants Amazon and Apple have once again outperformed Wall Street’s expectations in their latest quarterly earnings reports. However, both companies have issued cautious outlooks for the coming months, citing growing uncertainty around tariffs and global trade policies. Here’s a breakdown of what’s driving the headlines-and what it means for the broader tech sector.
Amazon: Strong Q1, Cautious Q2 Guidance
Amazon reported impressive first-quarter results for 2025, with revenues climbing to $155.7 billion (a 9% year-on-year increase) and net income soaring to $17.1 billion-both figures beating analyst expectations. The company’s core businesses, including Amazon Web Services (AWS) and digital advertising, continued to deliver robust growth. AWS revenue jumped 17% to $29.3 billion, while ad revenue surged 19% to $13.92 billion, underscoring Amazon’s expanding influence in cloud computing and digital marketing.
Despite these strong numbers, Amazon’s stock slipped more than 4% in after-hours trading. The reason: a softer-than-expected forecast for the second quarter. Amazon projected operating profit between $13 billion and $17.5 billion and sales of $159 billion to $164 billion, both below Wall Street’s estimates.
CEO Andy Jassy specifically highlighted the unpredictability of future performance, pointing to “tariff and trade policies” as a major concern. He noted that while consumer demand remains steady, potential tariff hikes could force price increases in the coming months, impacting both profitability and customer sentiment.
Apple: Record Services Revenue, But Tariff Headwinds Loom
Apple also posted a strong quarter, with revenue rising 5% year-on-year to $95.4 billion and earnings per share up 8% to $1.65-again, both surpassing analyst forecasts. The company’s Services division was a standout, hitting an all-time high of $26.65 billion in revenue, while iPhone sales remained the primary revenue driver at $46.84 billion.
However, Apple’s outlook is clouded by the impact of tariffs, particularly those targeting products assembled in China. CEO Tim Cook warned that the company expects a nearly $1 billion hit to profits in the second quarter due to new US tariffs. He described the environment as “very difficult” for forecasting beyond June, especially given weaker-than-expected sales in China and ongoing trade policy uncertainty.
Apple’s CFO emphasized that while the company’s fundamentals remain strong-including a record-high installed device base and a 4% dividend increase-macroeconomic and geopolitical factors are making it harder to predict future performance with confidence.
Tariffs: The Unpredictable Wildcard
Both Amazon and Apple have joined a growing list of major corporations warning investors about the risks posed by shifting US trade policies and tariffs. The unpredictability of these policies is already prompting some companies to revise or even withdraw their full-year outlooks for 2025.
“Obviously, none of us knows exactly where tariffs will settle or when,” said Amazon CEO Andy Jassy. “We haven’t seen any attenuation of demand yet. To some extent, we’ve seen some heightened buying in certain categories that may indicate stocking up in advance of any potential tariff impact.”
