Apple reported a notable rebound in sales this spring, managing to overcome challenges such as weakness in the Chinese market and a slight dip in iPhone sales. The tech giant announced revenue of $85.8 billion for the three months ending in June, a 5% increase compared to the same period last year. This marks a return to growth after a sluggish start in early 2024.
The report provided a glimmer of positive news amidst a broader decline in major US stock indices, with the Dow Jones Industrial Average dropping 1.2%, the S&P 500 slipping almost 1.4%, and the Nasdaq falling 2.3%. Investors were particularly cautious, as seen in the sell-off of shares in big-name companies, including Amazon and Intel, during after-hours trading.
Intel faced a steep decline, with shares plunging more than 19%. The chipmaker is grappling with a sales slump and has announced a cost-cutting plan that includes over 15,000 job cuts. The company reported a 1% year-on-year decline in sales for the quarter and warned of a challenging second half of the year. CEO Pat Gelsinger noted that the firm had not fully capitalized on emerging trends like artificial intelligence (AI) and emphasized the need for significant operational changes.
Amazon’s shares also fell by more than 4% following the announcement of a 10% sales growth to $148 billion. However, this marked a slowdown from the previous quarter, and the company forecast further weakening ahead, putting pressure on profit margins even as it continues to invest heavily in areas like AI.
The broader market’s decline was mirrored in Asia, with Japan’s Nikkei index experiencing a significant drop of 5.8%. The recent volatility has been influenced by investor concerns over the high costs associated with AI investments and the shifting dynamics in the tech industry.
Despite these challenges, Apple has positioned itself favorably within the AI landscape. The company has been enhancing its software with AI-powered features branded as “Apple Intelligence.” These features include easier recording and transcription of phone conversations, personalized emoji generation, and improved interactions with Siri. These upgrades are currently available to developers in the US and are expected to be rolled out more broadly later this year on newer devices.
Apple CEO Tim Cook expressed optimism about the company’s future, particularly in leveraging AI technologies. He noted that the new AI features provide “another compelling reason for an upgrade,” suggesting continued growth in the coming months. Over the April to June period, while iPhone sales dropped by 1%, the decline was offset by increased sales of Macs and iPads. Additionally, Apple reported an all-time high in revenue from its services division, which includes Apple Pay and Apple News.
