With uncertainty swirling around overconcentration in mega-cap tech companies, investors are closely monitoring quarterly earnings.
Yesterday, both Apple and Amazon released their quarterly earnings. These results highlighted a growing divergence in strength among the world’s largest tech giants.
Mixed Results for Apple
Apple reported quarterly revenue of over $94 billion, showcasing a jump of 6% over last year’s numbers. However, this good news was paired with slower revenue in China and a more modest outlook for sales growth.
As a result, market sentiment for Apple has been mostly negative. Investors seem to remain concerned about the growth prospects for upcoming Apple product launches. That being said, iPhones remain a highly desirable product for consumers, and there’s no indication that will be changing anytime soon.
“It’s important to remember that most of the new iPhone 16 sales were not reflected given its release date late in Q4,” noted Emma Bakken, Senior Business Analyst at Direxion. “Apple may see some delayed gratification as many new product launches came late in Q4 and will see those play out in the next earnings cycle.”
Direxion offers a medley of investment options to play off this Apple news. Investors looking to profit off of the Apple slump may want to try the Direxion Daily AAPL Bear 1X Shares ETF (AAPD), which seeks to provide the inverse of Apple’s daily performance. However, one could alternatively try the bullish Direxion Daily AAPL Bull 2X Shares (AAPU) to bet big on iPhone sales in the holiday season.
Amazon Bets on AI
Unlike Apple, Amazon saw a far more clear-cut victory this quarter. The tech and retailing giant reported net sales of nearly $159 billion this year. That represents an 11% climb from last year.
In the report, Amazon detailed a significant jump in spending on property and equipment, primarily for generative AI investments. However, Amazon expects this investment to pay off in the long run.
“It’s clear that Amazon is on the right track for AI monetization, primarily through AWS,” Bakken added. “Some of Amazon’s Mag 7 peers are having a harder time proving to investors that current AI spending will ultimately be monetized.”
With Amazon on track to continue impressing the market, investors can capitalize on it with the Direxion Daily AMZN Bull 2X Shares (AMZU). AMZU offers leveraged exposure to the daily performance of Amazon’s stock.
Whenever it’s earnings season for tech giants, investors can make short-term plays on the results using Direxion’s suite of ETFs. Currently, Direxion offers over 90 ETFs listed in the United States.
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