Amazon and Apple posted better-than-expected sales, reassuring investors the tech giants will be able to weather a shrinking US economy.
Amazon predicted in a trading update that higher fees for its Prime membership would boost its bottom line, while Apple said demand for its flagship iPhone remains strong.
Both companies said they were making progress in controlling running costs, even though prices were rising rapidly.
The updates sent shares higher.
Quarterly updates from Apple and Amazon are closely watched as indicators of how customers are reacting to the economic climate.
On Thursday, official figures showed the US economy contracted for a second straight quarter, a milestone that would be considered an economic recession in many countries, but not in the US, which uses additional data to make that statement.
- The US economy is shrinking again, triggering fears of a recession
“Our June quarter results continue to demonstrate our ability to effectively run our business despite the challenging operating environment,” said Luca Maestri, Apple’s chief operating officer, adding that the company expects growth to pick up in the coming months will.
Overall, Apple’s revenue rose 2% year over year to $83 billion (£68.1 billion) between April and June. Sales of iPhones continued to boost the company’s profits as supply shortages held back sales of other products.
The services business, which includes Apple Pay and its streaming music and TV services, also grew 12%.
Meanwhile, Amazon said its revenue rose 7% to $121.2 billion despite its e-commerce business taking a beating in recent months. Online sales fell 4%, the second consecutive quarter of decline.
But the company continues to be shielded by the strength of its cloud computing division, AWS, which posted a 33% increase in revenue.
Amazon spooked investors this spring when online sales slumped and warned it had spent too much money renting and expanding warehouses in a bet that pandemic-era shopping patterns would continue.
This time, however, it offered a more optimistic outlook.
“Despite continued inflationary pressures on fuel, energy and transportation costs, we are making progress on the more controllable costs we referenced last quarter, specifically improving the productivity of our fulfillment network,” said Chief Executive Andy Jassy.
Amazon said its e-commerce sales were looking particularly weak as Prime Day, when discounts usually lead to a surge in purchases, was pushed back to July from June.
“Big tech has been a mixed bag this earnings season, but Amazon has proven that the strong can survive even the harshest environments,” said Laura Hoy, equity analyst at Hargreaves Lansdown.
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