US stock index futures saw an increase late Thursday, primarily driven by robust quarterly results from Amazon and Microsoft, which renewed investor confidence in artificial intelligence. However, gains were limited by a significant decline in Apple shares following a weaker-than-expected sales outlook. Amazon's shares climbed about 9% in extended trading after its Amazon Web Services (AWS) division reported a 37% revenue rise to $42.2 billion, marking its fastest expansion in 18 quarters and surpassing analyst forecasts. This performance, coupled with Amazon stating its capital expenditure would reach $220 billion for the year (up 10% from previous forecasts) to expand AI infrastructure and data centers, reinforced optimism around its AI strategy.
Conversely, Apple’s stock dropped more than 6% in extended trading despite surpassing expectations for its fiscal third-quarter revenue ($109.42 billion, up 16.4%) and earnings ($2.02 per share). Investors focused on Apple's guidance for current-quarter revenue growth of 9% to 11%, falling short of Wall Street's 12% estimate, and warnings about increased memory and component costs due to booming AI demand, alongside weaker sales in China and slower growth in its services business. Services revenue increased 12.1% to $30.74 billion but missed the $31.22 billion consensus forecast, raising concerns about potential slowdowns once iPhone demand normalizes.
This divergence reinforces a trend within the technology sector where companies demonstrating rapid growth in cloud and AI revenue are rewarded, while those with rising costs outpacing cash generation face investor scrutiny. Earlier in the week, Microsoft surged over 15% after an upbeat cloud forecast, and the PHLX semiconductor index jumped 8.2%. However, Meta Platforms fell about 8% after reporting a steep decline in free cash flow, illustrating this selective investor response. Overall, the S&P 500 was set to decline 0.8% in July, the Dow Jones Industrial Average 0.2%, and the Nasdaq Composite 4.2% after a broad tech selloff, despite the recent rebound.
S&P 500 Futures climbed 0.26% to 7,491.75, Nasdaq 100 Futures advanced 0.7% to 28,440.0, and Dow Jones Futures added 0.2% to 52,506.0 by 20:10 ET (00:10 GMT). These movements indicate a cautious optimism in the market, with strong AI-related earnings from companies like Amazon and Microsoft boosting sentiment, but concerns over supply chain issues, rising costs, and a weaker outlook from Apple capping overall market gains. Analysts generally expect aggregate second-quarter earnings among S&P 500 companies to rise about 40%, with much of this growth attributed to AI-related businesses.
