To The Moon

$Apple(AAPL)$ $Amazon.com(AMZN)$

Introduction: A Streak That Defines Dominance

As the July 2025 earnings season hits full stride, two of the most iconic names in the S&P 500—Apple and Amazon—are once again center stage. Both companies are coming off an impressive run, having beaten consensus EPS estimates for eight consecutive quarters. Their streaks, a rarity even among blue-chip giants, have not only buoyed investor confidence but also reinforced the notion that these tech juggernauts have evolved into durable cash machines, even amid economic uncertainty and shifting consumption patterns.

Now, with Apple set to report after the bell on Thursday and Amazon following closely behind, the stakes are high. Wall Street is watching whether these earnings machines can defy the law of large numbers yet again. But with macro headwinds, currency pressures, and shifting consumer habits looming large, even these market titans are not immune to risk. Are investors too complacent? Or will Apple and Amazon once again rise above expectations and power the next leg of the tech rally?

Market Context: Rising Expectations in a Cautious Market

Following a strong run in the first half of 2025, the Nasdaq 100 has started to show signs of fatigue. While optimism over AI, consumer resilience, and Fed policy moderation has supported valuations, there's been a notable uptick in earnings sensitivity across mega-cap tech.

Apple (AAPL) and Amazon (AMZN) have been part of that narrative. AAPL shares are up 17% year-to-date as of mid-July, recovering from early-year lows driven by iPhone unit concerns and regulatory noise. Amazon, meanwhile, has climbed 22% YTD, lifted by AWS margin expansion and strong advertising momentum. Both stocks trade near their respective 52-week highs, meaning expectations are anything but low.

This quarter, the pressure isn’t just to deliver solid numbers—it’s to show that growth remains sustainable, innovation is translating to revenue, and margins are resilient despite inflationary noise in the background. With both stocks commanding premium multiples (Apple near 30x forward EPS and Amazon just under 50x), any hiccup could result in sharp re-ratings.

Performance Overview and Market Feedback

Apple: Earnings, Dividends, and a Growing Services Engine

Apple reported EPS of $1.67 last quarter, beating the $1.62 consensus. It marked the eighth straight quarter of earnings outperformance, thanks to record services revenue ($23.2 billion), stabilizing iPhone sales, and a stronger-than-expected performance in emerging markets. Yet, whispers of slowing hardware upgrades and weaker Mac sales linger.

In terms of capital allocation, Apple authorized another $90 billion in buybacks in April, maintaining its title as the most aggressive repurchaser in corporate America. The dividend yield remains modest at 0.5%, but with consistent growth. Analysts expect Q2 FY25 revenue of $84.9 billion and EPS of $1.60, with strength in wearables and services needing to offset flat hardware growth.

Market feedback has been cautiously optimistic. Morgan Stanley raised its target to $245, citing stronger iPhone 16 demand visibility. Meanwhile, some buy-side desks have taken a wait-and-see approach, concerned over China exposure and antitrust litigation in the EU.

Amazon: From E-Commerce to Efficiency Machine

Amazon crushed expectations last quarter with EPS of $1.14 versus the $0.83 consensus. The surprise came not from AWS (which grew a healthy 17%) but from North America retail margins, which hit a 7.4% operating margin—the highest ever. Cost efficiencies from regionalized fulfillment centers are paying off.

Advertising revenue continues to grow at a double-digit clip, hitting $13.5 billion, nearly eclipsing YouTube in quarterly ad revenue. Analysts now expect Q2 revenue of $155 billion and EPS of $1.17. The question this quarter is whether AWS can maintain its margin expansion, and if GenAI monetization is moving from pilot phase to material revenue driver.

Market sentiment is bullish. JPMorgan recently reiterated Amazon as a top pick with a $245 target, while BofA is watching signs of AWS cross-selling into AI start-ups more closely.

Apple vs. Amazon: A Growth Comparison (2025)

• Growth Leader: Amazon Amazon is clearly outpacing Apple in revenue, EPS, and margin expansion, driven by AWS, advertising, and operational efficiencies in retail. It’s in a scale-up phase with multiple engines of growth.

• Stability & Buyback Engine: Apple Apple remains a highly profitable cash machine, with dependable earnings, best-in-class buybacks, and growing high-margin services. However, its revenue growth is modest, and innovation risk is rising.

Investment Highlights

Apple

• Services Growth Engine: With over 975 million paid subscriptions across Apple One, iCloud, and Apple Music, services now account for nearly 30% of revenue. The segment enjoys 70%-plus gross margins, helping stabilize earnings even when hardware lags.

• Wearables and Vision Pro: Apple’s push into spatial computing with Vision Pro is a long-tail investment. Early sales have been modest, but the developer ecosystem is growing. The Watch and AirPods lineup continue to see healthy adoption globally.

• China Risks: With 19% of total revenue still coming from China, geopolitical and regulatory concerns remain. However, Apple’s continued shift toward India as a manufacturing base and growing sales in Southeast Asia offer some diversification.

• Buybacks and EPS Support: Share repurchases have become the primary EPS growth lever. With over $620 billion in buybacks over the past decade, the float has shrunk by nearly 40%. This offers downside protection for EPS even if topline revenue slows.

Amazon

• AWS Still the Crown Jewel: AWS remains Amazon’s most profitable unit, with operating margins of 30.8% last quarter. The company is aggressively pursuing AI workloads, recently announcing Bedrock updates and Titan model improvements.

• Retail Transformation: The regional fulfillment model has boosted shipping speeds and reduced logistics costs. Combined with data-driven inventory management, this has driven a dramatic improvement in North America retail margins.

• Advertising Surge: Amazon is now the third-largest digital ad platform globally, behind only Meta and Google. With Prime Video ads rolling out across major markets, the ad segment could surpass $60 billion annualized by 2026.

• AI Monetization Still Nascent: While Amazon has AI ambitions, monetization is less clear compared to peers like Microsoft. Bedrock is gaining traction, but usage-based billing hasn't yet translated into material upside.

July 2025 Entry Price Verdict: Buy, Sell, or Hold?

Apple (AAPL): Hold

Apple remains one of the most reliable profit engines in the S&P 500. But at ~30x forward earnings and with top-line growth expected to remain in the low single digits, the stock is pricing in a lot of perfection. While services will cushion against hardware volatility, any meaningful upside likely requires a surprise reacceleration in iPhone or a breakout hit in wearables or Vision Pro. For new investors, waiting for a pullback toward $190–$195 may offer a more attractive entry.

Current Price (July 2025): ~$225 Target Range: $240–$250 Buy Below: $195 Verdict: Hold

Amazon (AMZN): Buy

Amazon is executing exceptionally well across all major segments. With structural margin improvements in retail, ad growth, and a still underpenetrated AWS AI business, the multi-engine growth story is intact. Trading at ~48x forward earnings with high visibility into 15–20% EPS CAGR, Amazon remains attractive for long-term investors.

Current Price (July 2025): ~$205 Target Range: $240–$260 Buy Below: $215 Verdict: Buy

Conclusion: Durable Giants Facing Higher Bars

Apple and Amazon are no longer just FAANG names—they’re foundational to passive portfolios, sector ETFs, and institutional core holdings. But that visibility comes with pressure. After eight straight quarters of EPS beats, the burden of expectations is immense. Investors aren’t just looking for solid numbers—they want acceleration, margin resilience, and clear strategic clarity on where the next $100 billion in growth will come from.

Apple, while still highly dependable, is navigating a mature product cycle and may need a major product catalyst to justify continued multiple expansion. Amazon, meanwhile, is evolving into a higher-margin, diversified platform with AI tailwinds that could surprise to the upside.

As the July 2025 earnings week unfolds, long-term investors should pay less attention to the headline beats and more to the commentary on monetization of AI, geographic resilience, and unit economics. In that regard, Amazon appears better positioned for sustained upside, while Apple remains a steady, cash-rich pillar worth holding—but not chasing at current levels.

Key Takeaways:

1. Apple and Amazon have both beaten EPS estimates for eight consecutive quarters.

2. Apple’s strength lies in services, while hardware shows signs of saturation.

3. Amazon is benefiting from retail margin expansion and ad revenue growth.

4. Apple is a Hold at current valuations; Amazon is a Buy with room to run.

5. Investors should focus less on quarterly beats and more on strategic AI monetization and global diversification.

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

@Daily_Discussion @TigerPM @TigerObserver @Tiger_comments @TigerClub

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

@Daily_Discussion @TigerPM @TigerObserver @Tiger_comments @TigerClub