Amazon and Apple Shares Rise After Updates
Better-than-expected results from tech giants Amazon and Apple last night helped allay some of Wall Street’s concerns about the latest contraction in the US economy.
Amazon shares were up 13% in expanded trading as revenue grew 7% above forecasts to $121.2 billion (£99.1 billion), driven by a one-third jump in revenue at Amazon Web Services and 10% growth in the company’s North American arm.
The improvement failed to offset rising costs as operating profit more than halved to $3.3 billion (£2.7 billion). Third quarter revenue is expected to be between $125 billion and $130 billion and operating profit between breakeven and $3.5 billion.
Hargreaves Lansdown analyst Laura Hoy said, “Big tech has been a mixed bag this earnings season, but Amazon has proven that the strong can survive even the harshest environments.”
Apple squeezed growth in the most recent quarter after sales rose 1.9% to $83 billion (£67.9 billion), but operating profit fell $1 billion to $23.1 billion (£18. 9 billion).
Apple shares were 3% higher in after-hours trading, leading to a 1% rise in Nasdaq futures ahead of today’s Wall Street opening.
Major US indices were higher yesterday as a second consecutive negative reading of US GDP boosted hopes that the Federal Reserve will ease the pace of rate hikes.
The FTSE 100 index was largely flat yesterday, with CMC Markets expecting the top flight to open 19 points higher today at 7,364.