Market Minute: Previewing AMZN & AAPL Earnings

Two of the Mag 7, Meta Platforms (META) and Microsoft (MSFT) report after the bell today. However, while options volatility is still elevated, let’s look at Amazon (AMZN) and Apple (AAPL) earnings, which are due out tomorrow postmarket.

Amazon found itself in hot water with the Trump administration yesterday after a report said it planned to add tariff costs next to product prices. It walked back the news quickly, saying it had only “considered the idea” for its low-cost storefront, Haul. Ultra-cheap Chinese competitors like Shein and PDD’s (PDD) Temu have raised prices significantly, with some showing “import charges” as a line item in receipts. 

As a platform hosting businesses around the world, Amazon is susceptible to price increases from tariffs. Many of its own private label brands also are manufactured in China. However, Amazon is a behemoth with a variety of revenue streams, including its AWS segment as well as advertising revenues and subscription revenues. It also competes as a streaming platform and recently gained creative control of the James Bond franchise. These revenues don’t outweigh overall retail revenues but can help insulate it from lower shopping.

Zacks estimates Amazon will report EPS of $1.35 (+19.5% year-over-year) and revenue of $154.56 billion (+8% year-over-year). While we are unlikely to see tariff impacts hitting this reported quarter, eyes will be on any forward guidance – and after yesterday, any hints of tension with the White House. The stock is up about 4% over the last year and down over 14.5% year-to-date. The options market is implying a $21 move, or around 11%.

Apple (AAPL) similarly manufactures a lot of its goods in China, though it has announced steps to move its U.S. supply chain into India by the end of next year. Note that despite President Trump’s goal of onshoring manufacturing, Apple, one of the jewels of the U.S.’s crown, is not planning to come home – it’s moving where a trade deal is likelier. However, Bloomberg reports that its 20-year anniversary model, coming in 2027, is “extraordinarily complex” and thus must be made in China.

Speculation around new product launches is key to Apple’s hype, with outlets like MacRumors or 9to5Mac reporting on every tiny update they can find, down to engineering approvals. The iPhone 17 is expected this year, along with a potential new Apple Vision ‘Air’. However, Apple has struggled to find a new breakout product – the Apple Vision launch performed worse than expected as VR goggles have failed to catch on, and Bloomberg calls its Apple Intelligence AI “subpar.” It also shuttered its self-driving car project in 2024.

Extraordinary fan loyalty keeps Apple at the top, but it needs to keep pace with fellow tech giants and innovators. Its love of keeping everything in-house may be hurting it here as rapid changes ripple through the industry. Antitrust cases around its store have also threatened its pivot towards services revenue.

Zacks expects Apple to report EPS of $1.61 (+5% year-over-year) and revenue of $94 billion (+3.5% year-over-year). Shares are up around 25% over the last year, but down over 15% year-to-date. The options market implies an $8 move, or around 4%: less than Amazon, but still a swing.

With so much of the market weighted towards Mag 7 names, AMZN or AAPL could change the whole market trajectory. Tune into the Schwab Network for live earnings breakdowns and more.