Apple and Amazon Pull Back After-Hours Despite Nasdaq Surge on Strong Tech Earnings

After a strong showing during Thursday's regular trading hours—fueled by impressive earnings reports from Microsoft $MSFT and Meta Platforms $META —U.S. technology stocks saw a sharp reversal in after-hours trading. Apple Inc. $AAPL and Amazon.com Inc. $AMZN led the downturn, as investors reacted negatively to corporate forecasts and cost guidance that fell short of expectations, tempering earlier optimism in the tech sector.

While the Nasdaq Composite Index $^IXIC surged 1.5% during the day, sentiment shifted quickly once market bellwethers released more nuanced outlooks after the close.

Pressures Behind the Headlines: Tariffs and Tight Margins

Apple’s stock dropped approximately 4% in after-hours trading, even though the company’s quarterly results beat analyst estimates. The downturn was largely driven by CEO Tim Cook’s disclosure that U.S. tariffs could add nearly $900 million in additional expenses for the June quarter, should current policies remain unchanged. The figure signals growing geopolitical and trade-related risks that could dent future profitability—even for the world’s most valuable publicly traded company.

Amazon also experienced a 2.5% dip post-market, following its earnings release. While Amazon Web Services (AWS) saw a 16.9% increase in revenue—reaching $29.27 billion—the figure missed Wall Street's more bullish expectations of $30.9 billion. Additionally, Amazon’s operating profit guidance fell short of market forecasts, further dampening sentiment.

Contributing Factors Behind the Late-Day Dip

• Cost Pressures at Apple: Rising input costs tied to international trade policies are clouding future earnings outlooks.

• Cloud Growth Concerns at Amazon: Despite solid year-over-year revenue growth, AWS performance failed to meet elevated investor expectations.

• Profitability Caution: Both companies projected operating margins that appear vulnerable to macroeconomic and regulatory headwinds.

• Market Euphoria Moderation: Earlier enthusiasm from Microsoft and Meta earnings created high benchmarks that were difficult to maintain.

• Tech Stock Volatility: After a strong intraday rally, profit-taking and recalibrated forecasts led to a swift after-hours correction.

Tech Rally Momentum Faces a Reality Check

Microsoft and Meta Platforms helped power early gains, showcasing strong quarterly performance and positive AI-related developments.

The broader Nasdaq Composite surged, reflecting heightened investor confidence in large-cap tech.

Apple’s tariff-related disclosure reminded markets of the fragility of global supply chains and persistent trade tensions.

Amazon’s cloud business remains under the microscope as investors balance growth with competitive and margin-related concerns.

Although the tech rally during regular hours was driven by impressive top-line metrics and expanding AI narratives, the after-hours environment reflected a more sobering reality. Even sector leaders like Apple and Amazon are not immune to the combined pressure of macroeconomic uncertainty and intensifying investor scrutiny.