Apple had a comeback in sales this spring despite facing difficulties in China and a slight dip in iPhone sales. This provided a much needed boost to the markets. The company reported $85.8 billion in revenue for the three months ending in June showing a 5% increase compared to the same period last year and signaling a return to growth after a slow start to 2024.
However this positive report came at a time of market turbulence. Major US stock indexes closed lower with Amazon witnessing sell-offs after trading hours. Intel’s shares dropped by more than 19% as the chipmaker revealed plans for cost reductions including cutting over 15,000 jobs due to declining sales.
Amazon also experienced a stock decline of over 4% despite reporting a 10% rise in sales to $148 billion. This growth was slower than the previous quarter. The company anticipates challenges ahead that may impact profit margins despite increased investments in AI technology.
The market was unsettled by concerns about costs linked to AI development and companies facing difficulties in falling behind the AI competition. This has led to an increase in market volatility as investors approach these challenges cautiously.
Intel for example has lost popularity as businesses turn their attention to Nvidia, a known competitor recognized for its AI chips.
During the quarter ending in June Intel saw a 1% decrease in sales compared to the same period last year. Intel projected a gloomy outlook for the latter half of this year. CEO Pat Gelsinger acknowledged the necessity for measures and significant changes in how the company operates.
On the other hand Apple has positioned itself to take advantage of the AI trend by highlighting how AI driven improvements to its software will attract customers to upgrade their devices. Recently the company introduced some of these features under the “Apple Intelligence” brand to developers in the United States.
These enhancements streamline tasks such as recording and transcribing phone conversations creating emojis and interacting naturally with Siri – Apple’s virtual assistant. While these enhancements will be available to users this year they will only be accessible on newer Apple devices.
Optimistic about Apple’s prospects CEO Tim Cook emphasized the potential for AI to spur growth. He underscored that these new AI capabilities would present “another reason for an upgrade ” hinting at expectations, for growth in the upcoming months.
In the months of April, through June, although there was a decrease in iPhone sales by 1% Apple saw a rise in sales for Macs and iPads. Additionally the company achieved an all time revenue from its services sector including offerings such as Apple Pay and Apple News.
