Sales at Apple rebounded this spring, overcoming challenges in China and a dip in iPhone sales, providing some relief to jittery financial markets.
The tech giant reported $85.8 billion (£67.3 billion) in revenue for the three months ending in June, marking a 5% year-on-year increase and a return to growth after a slump at the beginning of 2024.
This report came as the three major US stock indexes closed lower, with investors selling off big names like Amazon in after-hours trading.
Intel shares plummeted by more than 19% as the chipmaker responded to a sales slump with a cost-cutting plan that includes over 15,000 job cuts.
Amazon shares also fell by more than 4% after the e-commerce giant reported a 10% increase in sales to $148 billion.
However, this marked a slowdown from the previous quarter, and the company forecast further weakening in the coming months, putting pressure on margins even as it ramps up investments in areas like artificial intelligence (AI).
Overall, the Dow Jones Industrial Average dropped 1.2%, the S&P 500 slipped almost 1.4%, and the Nasdaq fell 2.3%.
On Friday, Asian stocks also declined, with Japan’s Nikkei being the hardest-hit major index, ending the day down by 5.8%.
Bets on AI have scrambled markets in recent weeks, as investors grow wary of the heavy costs associated with such investments, and companies seen as lagging in the AI race are hit hard.
Intel is among the companies that have fallen out of favor, as businesses turn to rival Nvidia, known for its powerful AI chips.
Intel reported a 1% year-on-year sales decline for the three months ending in June and warned that the second half of the year would be worse than expected.
“Our revenues have not grown as expected – and we’ve yet to fully benefit from powerful trends, like AI,” chief executive Pat Gelsinger wrote in a memo to staff.
He said the situation required “bolder actions” and the firm had to “fundamentally change the way we operate”.
Apple, on the other hand, stated that it is well-positioned to benefit from technological changes, with AI-powered enhancements to its software encouraging customers to upgrade their devices.
The company recently introduced some of these new features, branded as “Apple Intelligence,” to developers in the US.
The new system offers iPhone users the ability to record and transcribe phone conversations more easily, generate personalized emojis while messaging, and interact more conversationally with the company’s voice assistant, Siri, among other improvements.
Apple announced that these features would be rolled out more broadly later this year but will be available only on its newer devices.
Apple boss Tim Cook said the new features would provide “another compelling reason for an upgrade”. The firm said it expected growth to continue in the months ahead.
“We remain incredibly optimistic about the possibilities of AI and we will continue to make significant investments in this technology,” he said.
Over the April to June period, sales of iPhones slipped 1%, a drop outweighed by increased sales of Macs and iPads.
Apple also reported an all-time record in revenue from its services division, which includes offerings such as Apple Pay and Apple News.