The earnings season is well underway and the results have been generally positive. In the past week, 179 companies reported – and of those, 140 beat the estimates on EPS.
Investors, who had been bracing for impact amid swirling economic uncertainty, are now exhaling with relief. The numbers aren’t flawless, but the market heavyweights – especially the tech giants – managed to beat expectations. And they did it in spite the economic and trade turmoil that has characterized the first few months of President Trump’s new term in office.
Beating the forecasts was a sound first step; now investors want to know what’s coming next. The analysts at banking giant J.P. Morgan are trying to answer that for us. They’re looking at Apple (NASDSAQ:AAPL) and Amazon (NASDAQ:AMZN) to determine how these ‘Magnificent Seven’ stocks will fit in investors’ portfolios after the earnings results. Let’s take a closer look.
Apple
We’ll start with Apple, a company that needs little introduction. While most people know it for its iconic devices, Apple’s real edge lies in its ability to build a seamless ecosystem that keeps users coming back. From hardware to services, the company has mastered the art of integration – turning convenience into loyalty. It’s also one of the few companies with a fanbase so devoted, and product launches often feel more like global events than tech rollouts.
In recent months, however, Apple’s stock has taken a hit from Trump’s tariff policy. The company sources parts and devices from various countries, including India, Vietnam, and China, and is vulnerable to import/export duties. That vulnerability extends beyond the company’s supply lines to its distribution network as well; China is a major market for Apple’s iPhones.
Earnings, however, have provided a bright spot for Apple, even as the company’s stock has come under pressure. The company’s fiscal Q2 2025 results came in ahead of expectations, with revenue hitting $95.4 billion – up 6% year-over-year and nearly $1 billion ahead of estimates. EPS climbed to $1.65, a 12-cent increase over last year and 3 cents per share over the forecast.
Looking into the drill-downs, we find that Apple’s 2Q25 EPS was a record for a March quarter. The company’s revenue included $68.7 billion in product sales and $26.6 billion in services revenues; the services subtotal was up 12% year-over-year and was an all-time record for the segment. Other bright spots in the earnings release included solid revenues from the iPad and Mac product lines, which were up 15% and 7% year-over-year, respectively.
Despite these positives, AAPL shares tumbled ~4% following the earnings release. Pressure on the stock has come from China, where total revenues came in at $16 billion while analysts had been looking to see $16.83 billion. Apple’s iPhones are facing heavy competition from Huawei, China’s own domestic tech giant. In addition, Apple is facing headwinds from potentially higher tariffs; the company estimates that cost at $900 million in fiscal Q3.
The headwinds aren’t preventing JPMorgan’s Samik Chatterjee from taking an upbeat view of Apple. The 5-star analyst notes that Apple is facing challenges, but goes on to explain why he expects the company to keep delivering on revenues.
“Apple’s results showcased the resilience that investors have come to expect as the outcomes outlined by the company in relation to F3Q (June-end) guidance was better than feared by investors in the context of a challenging macro and tariff uncertainty. Additionally, Apple’s management team provided materially higher transparency in relation to assumptions embedded in the guidance and their updated thoughts on several issues, including tariffs and manufacturing footprint, relative to what we and investors have seen the management team being willing to share in the past… Our revenue expectations are largely unchanged following the print, but we do moderate gross margins slightly to account for the tariff headwinds likely tracking higher than estimated, despite limited guidance from the company, driving lower earnings estimates,” Chatterjee noted.
For Chatterjee, this all adds up to an Overweight (i.e., Buy) rating on AAPL, and his $240 price target suggests that the stock will gain ~17% in the coming months. (To watch Chatterjee’s track record, click here)
The rest of Wall Street is leaning bullish too. Among 27 analyst ratings, Apple holds a Moderate Buy consensus, based on 17 Buys, 6 Holds, and 4 Sells. With shares trading at $205.35, the average price target of $229.95 implies a potential 12% upside over the next year. (See AAPL stock forecast)
Amazon
Next up is Amazon, the undisputed titan of online retail. With a market cap just over $2 trillion, it ranks as the fourth-largest publicly traded company on Wall Street — and its scale is matched by a $637 billion in annual revenue. Amazon has cemented itself as the world’s go-to marketplace, where shoppers can find just about anything and have it delivered to virtually anywhere in the world.
But Amazon is more than just a retail juggernaut. Its cloud arm, AWS, is a powerhouse in its own right – a direct rival to Microsoft Azure and Google Cloud. AWS not only drives a massive chunk of Amazon’s profits, but it’s also where the company is flexing its AI muscles. From rolling out AI-powered tools for developers to enhancing logistics, personalization, and efficiency across its ecosystem, Amazon is weaving artificial intelligence into nearly every part of its business.
Against this background, Amazon released its 1Q25 results on May 1 – and delivered solid numbers for the quarter. Top-line revenue came in at $155.7 billion, reflecting an 8.7% year-over-year gain and beating forecasts by $580 million. At the bottom line, the company reported EPS of $1.59, 23 cents above expectations. This compares favorably to the 98-cent EPS reported in 1Q24.
Looking into the deeper data, we find that Amazon’s North American sales, at $92.9 billion, were up 8% year-over-year, while international sales gained 5% to reach $33.5 billion. AWS showed bigger gains, up 17% from the prior-year quarter and hitting $29.3 billion. Looking ahead to the second quarter of the year, Amazon is guiding toward quarterly revenue of $159 billion to $164 billion, compared to the expectations of $161.1 billion. Year-over-year, that revenue guidance translates into growth of 7% to 11%.
Doug Anmuth, another of JPM’s 5-star analysts, sums up his coverage of Amazon with a pithy phrase, ‘uneventful is good.’ He notes that the company faces challenges, but sees its strong position as a sound foundation to meet those challenges.
“AMZN delivered solid 1Q results & 2Q outlook w/overall less macro & tariff related impact than feared… While AMZN did not discuss all of its mitigation efforts related to suppliers & geographic sourcing of product, the company has taken steps to pull forward inventory. Importantly, AMZN remains focused on broad selection, low pricing, & fast delivery, and believes it typically emerges from uncertain macro periods w/greater relative market share gains… There will be some pushback on AWS growth of 17% in 1Q given recently rising expectations on the back of MSFT results. But we continue to believe that AWS is capacity constrained, & growth can tick higher in the back half as more supply comes online,” Anmuth opined.
Anmuth goes on to put an Overweight (i.e., Buy) rating on Amazon’s stock, a rating that he complements with a $225 price target. His target points toward a one-year upside potential for AMZN of ~18%. (To watch Anmuth’s track record, click here)
The tech giants tend to garner plenty of analyst attention, and Amazon is no exception. The stock has 49 recent Wall Street reviews, and the lopsided split of 48 Buys to 1 Hold gives AMZN its Strong Buy consensus rating. The stock’s $241.76 average price target implies a gain of 27% in the next 12 months. (See AMZN stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.