Explore Today's Market News from Behind the Markets:

Amazon's Cloud Just Grew the Fastest in 18 Quarters. Apple Set a Record and Got Sold.

- Amazon Web Services revenue grew 37% year over year to $42.2 billion — its fastest growth in 18 quarters, against analyst expectations of roughly 31% — reaching a $169 billion annualized run rate

- Amazon's total net sales rose 20% to $200.6 billion versus $196.4 billion expected, with operating income up 43% to $27.5 billion and advertising revenue up 26% to $19.8 billion

- CEO Andy Jassy raised 2026 capital spending guidance from $200 billion to $220 billion — an extra $20 billion — and the stock rallied anyway - Apple posted a June-quarter record: $109.4 billion revenue (up 16%), EPS of $2.02 against $1.89 expected, net income up 27% to $29.8 billion, and a 50.1% gross margin. Shares fell as much as 6% after hours on below-consensus September guidance blamed on memory and chip shortages

- Thursday's rebound was broad: Dow +613.92 to 52,208.06, S&P 500 +121.48 to 7,437.63, Nasdaq +679.24 (+2.78%) to 25,122.18, snapping a six-day losing streak

Thirty-Seven Percent

For most of this year the bear case on cloud computing was deceleration. The hyperscalers were spending unprecedented sums on data centers, and the growth rates they were buying with that money were flattening. Amazon Web Services grew 28% last quarter. Wall Street modeled roughly 31% for this one.

AWS delivered 37%.

That is not a beat at the margin. It is the fastest growth AWS has produced in 18 quarters — since 2021 — from a business now running at a $169 billion annualized rate. Acceleration at that scale is difficult to explain away as a one-off, and it arrived one day after Microsoft reported Azure accelerating to 43% when the Street expected 40%.

Two of the three largest cloud businesses on earth just posted accelerating growth in the same week, after eighteen months of investors being told the opposite was inevitable.

Amazon Asked for $20 Billion More

The rest of Amazon's quarter was strong in the places that matter. Net sales rose 20% to $200.6 billion, ahead of the $196.4 billion consensus. Operating income climbed 43% to $27.5 billion. The advertising business — the quietest compounding machine in the company — grew 26% to $19.8 billion.

Reported earnings per share came in at $5.75 against expectations near $1.82, but that headline figure is inflated by substantial non-operating gains and is not a clean comparison. The operating income line, up 43%, is the number to anchor on.

Then Jassy raised full-year capital expenditure guidance from $200 billion to $220 billion.

Consider what would have happened to that announcement a week ago. Meta raised capex guidance on Wednesday and lost 9% of its value. Amazon raised capex guidance on Thursday and rallied. The difference was not the spending. It was that Amazon showed the revenue arriving alongside it, and the market has abruptly started charging companies for the difference.

Apple's Record Wasn't Enough

Apple's quarter was, by any historical standard, excellent.

Revenue reached $109.4 billion, up 16% year over year and a June-quarter record. Net income rose 27% to $29.8 billion. Diluted EPS came in at $2.02, up 29%, against a $1.89 consensus. Gross margin held at 50.1%. Mac revenue jumped 29%.

The stock fell as much as 6% in extended trading.

Two things did the damage. Services revenue — the highest-margin, most-valued part of the business — came in short of forecasts. And the September-quarter outlook landed below consensus, with management pointing at component supply constraints. Specifically, memory.

That is the same shortage Samsung warned this week could persist into 2028. Apple is now the largest and most visible company to publicly guide its own revenue lower because it cannot get enough memory chips. What began as a semiconductor story has become a consumer-hardware margin story, and the industrial plumbing underneath the AI build-out keeps mattering more than the software on top of it.

Apple also carried a 22.7% year-to-date rally into the print. Good results that are already priced tend to be sold.

Tim Cook's Last Quarter

This was Tim Cook's final earnings report as chief executive of Apple.

He inherited a company worth roughly $350 billion in 2011. Three days before this report, Apple briefly touched a $5 trillion market capitalization — only the second company in history to do so. Whatever the market thinks of the September guidance, that is the arc of the tenure.

His successor inherits a different problem than the one Cook spent fifteen years solving. Cook's genius was supply chains. The company he is handing over is one whose supply chain is now the constraint on its earnings, in a component market where the sellers have the leverage for the first time in two decades.

What Lands Next

Thursday's reversal was powerful and narrow. The Dow rose 613.92 points to 52,208.06, the S&P 500 gained 121.48 to 7,437.63, and the Nasdaq jumped 2.78% to 25,122.18, ending a six-day losing streak. The Nasdaq-100 rose 3.4%. Microsoft alone added more market value in a single session than any company in history.

But the bond market did not participate in the optimism. Long-dated Treasury yields pushed to fresh multi-year highs even as equities rallied, with the 30-year near 5.23% — a 19-year peak — and the 10-year climbing to its highest level since January 2025. Brent crude settled at $90.12, on track to finish July up more than 20%.

Three of the four largest AI spenders have now reported, and the market's verdict is unambiguous: it will fund enormous capital programs, but only for companies that can show the revenue in the same quarter. That is a far narrower gate than the one that existed a month ago, and the capital-intensity question is no longer theoretical.

The question for August is whether rising yields eventually make that gate narrower still.