Apple and Amazon’s Tech Strength Gets Bulls Buying Despite Recession on the Radar

Apple and Amazon added about $175 billion to their combined market value after upbeat results boosted investor confidence on the ability of these firms to weather a slowdown in the economy.

While analysts noted these companies were not completely immune to broader economic hurdles, they said the weakness in consumer spending is not likely to send these firms into the red, deeming them “always reliable to buck the trend.”

Amazon’s shares rose about 11 percent to $135.50 after the e-commerce titan forecast upbeat third-quarter revenue, while those of Apple rose more than 3 percent as the company said appetite for iPhones remained strong despite consumers’ tightening spending.

Apple surpassed Wall Street expectations regarding revenue and profit, and its stock rose 3% in extended trading. The tech giant remains optimistic, yet cautious.

“In terms of an outlook in the aggregate, we expect revenue to accelerate in the September quarter despite seeing some pockets of softness,” Apple CEO Tim Cook told CNBC’s, Steve Kovach.

Despite chip manufacturers reporting slowing demand for smartphones globally, Cook told CNBC that Apple had success with converting Android users to iPhones during the second quarter.

“We had a record level of switchers and saw double-digit growth for customers new to iPhone,” Cook told the outlet.

While the two tech companies based in the US are making profits, the country, on the other hand, posted a successive quarter where the economy contracted. 

As reported extensively by WION, USA’s Gross Domestic Product (GDP) fell at a 0.9 per cent annual rate after a 1.6 per cent decline in Q1. The report further highlighted that there was a decrease in government spending and residential investment.

In an effort to combat the worst inflation outbreak in four decades, the Federal Reserve hiked its benchmark interest rate by hefty three-quarters of a point on Wednesday.

E-commerce giant Amazon also posted rosy results on Thursday. It reported its sales for the last quarter grew more than expected despite the economic turmoil.

Amazon sales reached $121 billion (€118 billion) in the quarter but the company reported a $2 billion (€1.95 billion) loss as it reined in costs,

While the results allowed investors to breathe a sigh of relief that they had not been worse, other tech companies saw bumpier quarters.

On Wednesday, Meta, the owner of Facebook and Instagram reported its first-ever revenue decline and predicted a dip in revenue for the next quarter.  

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