CNBC Daily Open: Apple and Amazon beat expectations, but not all’s rosy underneath

For the quarter that ended in March, Apple and Amazon reported top- and bottom-line numbers that beat analysts’ expectations, joining their fellow “Magnificent Seven” counterparts Alphabet, Microsoft and Meta Platforms on the podium. (Tesla’s long-promised full self-driving is still in the process of helping the electric vehicle company cross the line.)

That said, the financial results of both Apple and Amazon had some weaknesses under the hood. Apple’s Services division, which comprises offerings such as advertising, iCloud and Apple TV+, fell short of estimates. That matters because it’s the second-highest revenue generator for Apple, trailing only its iPhone division. As for Amazon, its cloud division — the largest cloud provider in the world — failed to meet revenue expectations for the third time in a row, suggesting growth is slowing.

CEOs of both companies also flagged the challenge in predicting how tariffs will affect not just the current quarter, but also the year ahead. Despite the excitement shown by investors over Microsoft and Meta — as seen in rallies in those companies’ shares Thursday — potholes still exist for Big Tech’s road ahead.

Note: CNBC Daily Open will be away on May 5, Monday, for the holiday in Singapore. The newsletter will return May 6, Tuesday.

Apple’s Services earnings missed expectations
Apple reported second fiscal-quarter earnings Thursday that beat Wall Street expectations. However, the company’s closely watched Services division fell short of estimates, and CEO Tim Cook said it’s “very difficult” to predict the impact of tariffs beyond June. Separately, Apple said it would appeal after a court found that the company willfully violated a 2021 injunction that came out of the Epic Games trial.

Cloud growth at Amazon slows
Amazon reported better-than-expected results for the first quarter. But revenue at Amazon Web Services grew at a slower pace than expected, a third straight revenue miss. The company issued light guidance, noting that “tariffs and trade policies” and “recessionary fears” could cause its forecast to change. Still, CEO Andy Jassy said he’s “optimistic” the company could emerge from the uncertainty stronger.

Big Tech stocks boost U.S. indexes
U.S. stocks advanced Thursday, boosted by jumps in Meta Platforms and Microsoft shares after the companies reported rosy earnings. The S&P 500 gained 0.63%, the Dow Jones Industrial Average added 0.21% and the tech-heavy Nasdaq Composite climbed 1.52%. The U.K.’s FTSE 100 rose a fractional 0.02% to extend its winning streak to 13 sessions, its best run since 2017. Most other European markets closed for the May 1 holiday.

Request for ‘tariff exclusion process’
The U.S. Chamber of Commerce urged U.S. President Donald Trump’s administration to immediately implement a “tariff exclusion process” in order to prevent a recession. The group asked that the process apply to all small business importers and on all products that “cannot be produced in the U.S.” White House deputy chief of staff Stephen Miller suggested the Trump administration is not considering the request, and said tax cuts will support small businesses.

‘Focus on innovation’: Nvidia to Anthropic
On Wednesday, Amazon-backed Anthropic said in a blog post that Chinese smuggling tactics involved chips hidden in “prosthetic baby bumps” and “packed alongside live lobsters.” A Nvidia spokesperson responded to Anthropic Thursday, saying that “American firms should focus on innovation and rise to the challenge, rather than tell tall tales.” U.S. chip export restrictions are set to take effect May 15.

[PRO] Is Big Tech back?
A pair of strong earnings reports from Microsoft and Meta appears to have reignited excitement around the artificial intelligence trade and may be, at least temporarily, pushing tariff worries from investors’ minds. However, some market watchers think Microsoft’s breakout rally is unique.

Nvidia CEO Jensen Huang gets first salary raise in a decade

Nvidia CEO Jensen Huang has made tens of billions of dollars in recent years from his stake in the chipmaker, but he’s getting his first salary increase in a decade.

Huang’s base salary rose to $1.5 million, a 49% increase from 2024, according to a proxy filing with the SEC on Thursday. His variable cash also went up by $1 million, or 50%, from the 2024 fiscal year. Stock awards grew to $38.8 million, bringing total pay to $49.9 million.

The compensation committee “believed this was appropriate in consideration of internal pay equity with the base salaries” of other top executives, the filing said, and “it represented Mr. Huang’s first base salary increase in 10 years.”