Why did the same rise in memory prices lift Amazon 10.8% and drop Apple 7.7%?
In yesterday's New York market, the contrasting moves of Amazon shares (up 15%) and Apple shares (down 7%) after their earnings drew attention.
Both beat market expectations on earnings, but the verdict split on the angle around semiconductors.
Amazon raised its capital spending plan for this year from $200 billion to $220 billion. The reason the company gave was not more demand but higher memory prices. Apple, reporting in the same week, also talked about memory prices. Chief executive Tim Cook called it a hundred-year flood. On the same fact, Amazon rose 10.8% in Friday pre-market trading and Apple fell 7.7%.
Why Amazon rose
Second-quarter revenue came to $200.6 billion, up 20%, and AWS, the cloud business, reached $42.2 billion, up 37%. Operating income was $27.5 billion, up 43%. The reason for lifting capex is what matters here. Saying it costs more to buy the same goods because prices rose is not the same as saying there are fewer goods to buy. The company expects that even at $220 billion it will not meet all of this year's demand, and expects the same next year. Standing on the renting side, you can pass a higher input cost through. Whether you can is decided by how long the queue is, and right now that queue is long.
Why Apple fell
Apple Q3 2026 earnings: record revenue, worsening Mac supply, and a below-consensus Q4 outlook (TechTimes, 2026-07-31)Quarterly revenue was $109.4 billion, up 16%, with net income of $29.8 billion and diluted earnings per share of $2.02, up 29%. iPhone brought in $54.3 billion, up 22%, and Mac $10.4 billion, up 29%, both June-quarter records. The figures were all good. What split the verdict comes after them.
What was good is the quarter just closed, and what was guided is the next one. Gross margin steps down from 50.1% to 47-48% and the growth guide sits under consensus. The memory going into one handset rising from $39 to $145, up 272%, is where that step down lives. Cost set the share price, not results.
Retrieved 2026-08-03 · Apple fiscal Q3 2026 results and earnings call, as reported by TechTimes
Why the same fact reads in opposite directions
Amazon buys memory and rents it out. Apple buys memory and sells it inside a finished product. The renting side can add a higher input cost to the rent. Whether it can is set by the length of the queue, and the cloud queue is long enough that the company says so out loud. The finished-product side has a harder time. Raise the price of a phone by $100 and fewer phones sell. So the higher cost comes out of margin rather than price. The two to three points Apple guided is that place. The single sentence that memory prices are rising reads as revenue or as cost depending on where you stand.
So what settles it
The question comes down to one thing. Whether the margin step-down Apple guided is a cost for a quarter or two, or a weight the finished-product side carries from here. Margin recovery settles it. If Q4 prints 47-48% and margin climbs again from the quarter after, it was a passing cost, and if it stays there or falls further, memory prices have changed the profit structure of finished goods. The thing to watch on Amazon's side is the reverse. Whether AWS revenue growth holds up against the raised spending. If the money goes up and the growth rate bends, today's higher input cost is not a cost that can be passed on. It is just a cost.
- Amazon and Apple reported in the same week and both beat market expectations.
- On the surface the split reads as coming from next-quarter guidance rather than results.
- One fact divided them: memory got more expensive, and Amazon rents it out while Apple sells it inside a finished product.
What happened next
Awaiting gradingScore on Apple's fiscal Q4 2026 and fiscal Q1 2027 gross margin. If margin prints 47-48% in Q4 and climbs again the following quarter, it was a passing cost, and if it stays there or falls further, memory prices changed the profit structure of finished goods.