$Apple(AAPL)$ Apple and Amazon $Amazon.com(AMZN)$ , two titans of the tech industry, are gearing up to release their Q3 2025 earnings on July 31, 2025. Both companies have maintained an impressive streak of beating earnings per share (EPS) estimates for eight consecutive quarters, with Apple surpassing revenue expectations in seven of those and Amazon matching that feat. As investors eagerly await the upcoming reports, the question looms: can they extend their winning streaks, and which company is poised to shine brighter this quarter? More importantly, whose long-term growth story holds the most promise? This analysis dives into the latest expectations, key growth drivers, and potential challenges for both companies, offering insights into their near-term performance and future trajectories.
Apple’s Q3 2025 Earnings Preview
Financial Expectations
Analysts project Apple’s fiscal Q3 2025 revenue to range between $88.5 billion and $89.0 billion, marking a 4% year-over-year increase from the $85.8 billion reported in Q3 2024. EPS is expected to fall between $1.42 and $1.45, a modest 1.4% rise from the $1.40 reported in the same quarter last year. Apple’s consistent track record of exceeding bottom-line projections in the past four quarters fuels optimism, though sentiment remains cautious due to external pressures.
Key Growth Drivers
Apple’s Services segment is the cornerstone of its growth, projected to generate $27.5 billion in Q3 2025, up 12% year-over-year from $26.65 billion in Q2 2025. This segment, encompassing Apple Music, iCloud, Apple TV+, and the App Store, benefits from over 1 billion active subscriptions, highlighting the stickiness of Apple’s ecosystem. The iPhone 16 lineup, launched in late 2024, has driven stronger-than-expected demand in China, reversing nearly two years of lagging revenue in that market. Additionally, Apple’s integration of AI, particularly Apple Intelligence, enhances user experiences and positions the company for future growth, with features like ChatGPT integration in the iPhone 16 showing promise.
Challenges and Risks
Despite these strengths, Apple faces headwinds. iPhone sales are expected to soften due to market saturation and anticipation for the iPhone 17 launch in September 2025. The wearables, home, and accessories category, which dropped 5% to $7.5 billion in Q2 2025, remains vulnerable to consumer spending shifts and inflation. Tariff threats, particularly a proposed 25% tariff on non-U.S.-manufactured products, could add $900 million in costs, potentially pushing iPhone prices to $3,500 if production shifts to the U.S. Apple is mitigating this by sourcing half of its U.S.-bound iPhones from India and other products from Vietnam, but the risk persists.
Analyst Sentiment
Analysts are cautiously optimistic. Jefferies upgraded Apple’s stock to “Hold” from “Underperform,” citing robust demand in China, though they project flat iPhone growth in the second half of 2025. The stock’s forward P/E ratio of approximately 27.8 suggests a reasonable valuation compared to peers, but its 5.8% year-to-date decline and underperformance against the S&P 500 and Technology Select Sector SPDR Fund (XLK) reflect market concerns about slowing growth and AI innovation lag.
Amazon’s Q3 2025 Earnings Preview
Financial Expectations
Amazon is expected to report Q2 2025 revenue between $159 billion and $164 billion, reflecting a 7-11% year-over-year increase. However, its operating income guidance of $13-$17.5 billion falls below analyst expectations of $17.8 billion, raising concerns about margin pressures. In Q1 2025, Amazon reported an EPS of $1.366 against expectations of $1.59, indicating a potential risk to its EPS beat streak. The company’s revenue growth remains strong, driven by AWS and advertising, but the softer guidance tempers expectations.
Key Growth Drivers
Amazon’s cloud computing arm, AWS, continues to be a powerhouse, benefiting from the ongoing cloud computing boom and AI integration. The advertising segment also shows robust growth, contributing to the company’s 10% year-over-year revenue increase in Q1 2025. Innovations in delivery speed and customer experience bolster its e-commerce business, maintaining Amazon’s dominance in online retail. The company’s focus on AI-driven solutions, including advancements in logistics and personalized advertising, positions it for long-term growth.
Challenges and Risks
Amazon’s softer operating income guidance reflects potential headwinds from tariffs and one-time charges. Like Apple, Amazon faces tariff-related uncertainties, which could impact margins and consumer pricing. The company’s high forward P/E ratio of 40-50 suggests a premium valuation, reflecting optimism about its growth but also increasing the stakes for delivering strong results. Any shortfall in guidance or AWS growth could lead to significant market reactions.
Analyst Sentiment
The sentiment around Amazon’s earnings is positive but cautious due to the conservative guidance. The Q1 2025 earnings call highlighted strong operational performance, but concerns about tariffs and margin pressures persist. Investors are particularly focused on AWS growth and any updates on AI initiatives, which could drive upside if Amazon exceeds expectations.
Who Will Impress More This Quarter?
Apple appears better positioned to impress in Q3 2025, given its consistent track record of EPS beats and robust Services growth. The company’s ability to navigate tariff challenges through supply chain diversification and its relatively attractive valuation (forward P/E of 27.8) provide a solid foundation. Amazon, while showing strong revenue growth, faces uncertainty due to its below-consensus operating income guidance, which could hinder its ability to extend its EPS beat streak. However, a positive surprise in Amazon’s guidance or strong AWS performance could shift the narrative in its favor.
Long-Term Growth Prospects
Apple’s Long-Term OutlookApple’s long-term growth is anchored by its sticky ecosystem, with over 1 billion active subscriptions driving recurring revenue. The Services segment’s double-digit growth and the integration of Apple Intelligence, including features like ChatGPT, position Apple to capitalize on the AI trend. While iPhone sales face challenges from market saturation, Apple’s diversified product portfolio (Mac, iPad, wearables) and supply chain resilience provide stability. Analysts project EPS growth of 5.2% for fiscal 2025 ($7.10) and 8% for fiscal 2026 ($7.67), reflecting confidence in Apple’s ability to sustain growth despite tariff risks.
Amazon’s Long-Term OutlookAmazon’s long-term growth story is compelling, driven by AWS’s dominance in cloud computing and its expanding role in AI. The e-commerce business benefits from continuous improvements in delivery speed and customer experience, while advertising revenue adds another high-margin stream. However, Amazon’s higher valuation (forward P/E of 40-50) and exposure to economic and regulatory risks, including tariffs, introduce volatility. If Amazon can overcome near-term margin pressures and deliver on its AI and cloud potential, its growth trajectory could outpace Apple’s, but it carries higher risk.
Conclusion
Apple is likely to extend its EPS beat streak in Q3 2025, supported by its Services segment and consistent performance, making it the safer bet to impress this quarter. Amazon’s strong revenue growth and AWS-driven potential are notable, but its cautious guidance raises doubts about an EPS beat. For long-term investors, Apple offers stability and a proven ecosystem, while Amazon’s cloud and AI focus provide higher growth potential with increased risk. The earnings reports on July 31, 2025, will be a critical moment for both companies, with Apple holding a slight edge for immediate impact and Amazon offering a bolder vision for the future.
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