Apple, Amazon and Reddit all reported after the U.S. close on July 30. Read together, the three reports pointed to the same issue running underneath the numbers: rising memory and storage chip costs.
Apple posted fiscal third-quarter revenue of $109.4 billion, up 16% year over year, with iPhone revenue at $54.2 billion and a third straight quarter of growth above 20%. Amazon reported second-quarter revenue of $200.6 billion, while Amazon Web Services brought in $42.2 billion, up 36.7% from a year earlier. Reddit said second-quarter revenue rose 61% to $805 million and lifted its guidance.
The market reaction split sharply. Apple fell about 6% in after-hours trading. Amazon rose more than 10%. Reddit dropped more than 10% despite beating expectations across the board.
Apple: Tim Cook used his final earnings call as CEO to warn about memory costs
Apple reported fiscal Q3 2026 results for the quarter ended June 27. Revenue reached $109.4 billion, up 16% year over year, and earnings per share came in at $2.02, up 29%. Both figures topped analyst expectations of $108.8 billion in revenue and $1.89 in EPS.
By product line, iPhone revenue was $54.25 billion, up 22% and ahead of the $53.86 billion analysts expected. It was the third consecutive quarter with iPhone growth above 20%, and the highest June-quarter figure on record. Mac revenue rose 29% to $10.35 billion, driven by MacBook Neo and MacBook Pro.
Two closely watched metrics missed. Services revenue was $30.74 billion, below the analyst estimate of $31.22 billion. Revenue from Greater China was $18.8 billion, below Bloomberg's expected $19.6 billion. CNBC said the effect of higher memory costs had already shown up in the quarter and could become a larger headwind going forward.
This was Tim Cook's last earnings call as CEO. According to the report, hardware engineering chief John Ternus will take over on Sept. 1. Cook used his closing remarks to issue a blunt cost warning, saying, "We reluctantly raised prices. I would describe this memory pricing move as a once-in-a-century flood. Memory prices have risen exponentially."
Apple already raised prices for Mac and iPad in June. Management said memory costs would climb again in the September quarter. The company's next-quarter guidance called for revenue growth of 9% to 11% year over year and gross margin of 47% to 48%, or about 46.5% excluding tariff rebates. Apple said the slower growth rate reflected about 2.5 percentage points of foreign-exchange headwinds and materially tighter supply-chain constraints.
Greater China remains a key area to watch. Revenue there rose 22.4% to $18.86 billion, while IDC data showed Apple's share of China's smartphone market increasing from 13.9% to 18.1%. The report said some of that growth may have come from purchases pulled forward after Apple signaled price increases in the second half, creating a rush in demand that could weigh on later numbers.
Amazon: AWS growth hit its fastest pace since 2021 as capex moved higher again
Amazon reported second-quarter revenue of $200.6 billion, up 20% from a year earlier and above analyst expectations of $196.5 billion. EPS came in at $5.75, far above the $1.82 consensus, though that figure included $53.4 billion in non-operating pre-tax income, mainly tied to gains on Amazon's Anthropic investment.
AWS was the center of the report. Revenue for the cloud unit reached $42.2 billion, up 36.7% year over year and ahead of the $40.5 billion analysts expected. It was the fastest AWS growth rate since 2021. On an annualized basis, AWS revenue has reached $169 billion. The report said that, if measured as a standalone company, the business would rank No. 24 on the Fortune 500. AWS operating income was $16.6 billion, up 64%, with an operating margin of 39.4%.
CEO Andy Jassy highlighted several large figures on the earnings call. AWS backlog, defined as contracted revenue that has been signed but not yet launched, reached $496 billion. Jassy said AWS was "very likely" to become a business generating $1 trillion in annual revenue in the future. He also said AI and custom silicon businesses, including Trainium and Graviton, had each crossed $25 billion in annualized revenue and were growing at triple-digit rates year over year.
Capital spending is still moving up. Jassy said Amazon now expects 2026 capital expenditures of $220 billion, up from a previous outlook of $200 billion, with higher storage chip costs as the main reason for the increase. Even so, he said, "$220 billion is still not enough to meet all 2026 demand. I believe the same will be true in 2027."
He also laid out the return logic behind that spending. Servers last at least five to six years. Most AI computing capacity is contracted for at least five years. After reaching break-even, servers and networking equipment can produce meaningful free cash flow for another two to three years. In Jassy's words, "Over time, revenue growth will outpace the growth in incremental capital expenditures."
For the third quarter, Amazon guided for revenue of $197 billion to $202 billion, below the LSEG analyst estimate of $204.1 billion. The company said this year's Prime Day shifted from July into June, distorting the year-over-year comparison for Q3. Excluding that shift, the growth rate would be about 400 basis points higher. Shares rose more than 10% after the report.
Reddit: beats everywhere, but a traffic warning changed the market's response
Reddit reported second-quarter revenue of $805 million, up 61% from a year earlier and well above the LSEG estimate of $730 million. EPS came in at $1.25, ahead of the expected $0.95. Net income rose to $253 million, nearly doubling from a year earlier. It was Reddit's eighth straight quarter of revenue growth above 60%.
The company's third-quarter guidance also beat expectations. Reddit projected revenue of $860 million to $870 million, with a midpoint of $865 million, above the analyst estimate of $828 million. Adjusted EBITDA was guided to $385 million to $395 million, ahead of the expected $368 million.
Operating trends were also strong. Advertising revenue rose 64% to $762 million. International revenue increased 84%. Global daily active uniques, or DAUq, rose 18% to 130.3 million, while U.S. DAUq increased 6% to 53.2 million. Free cash flow doubled to $261 million.
Despite that, Reddit shares fell more than 10% after hours. The trigger came from one line in the company's investor letter: search referrals were choppy.
The report said a meaningful share of new Reddit users still comes from traffic routed through Google search results. If Google changes the way search works, including replacing traditional results with AI Overviews, Reddit's user acquisition costs and growth ceiling could come under pressure.
The report also pointed to valuation. Reddit shares had already posted a sizable gain this year. After several quarters of 60%-plus growth, the market's bar for what counts as a positive surprise has moved higher. In that setup, revenue beating by nearly 10% and guidance beating by 4% was no longer enough to keep the stock moving up once a new risk appeared.
One common thread: memory pricing is shaping both margins and infrastructure budgets
Set side by side, the three reports all circle back to the same variable: rising memory costs.
Apple is dealing with the pressure on the consumer hardware side. Higher memory costs have already pushed the company to raise prices for Mac and iPad, and they are weighing on gross margin guidance for the second half. Amazon is seeing the pressure from the infrastructure side. Its 2026 capex plan was raised from $200 billion to $220 billion, and higher storage chip costs were cited as the main driver.
The report said the global DRAM market is dominated by three major suppliers: Samsung, SK Hynix and Micron. Demand for high-bandwidth memory, or HBM, tied to AI workloads has disrupted the traditional supply-demand balance in memory markets. Cook said Apple was "evaluating all supply flexibility options."
Supply choices may narrow further. According to the report, U.S. senators on July 30 asked Apple to stop sourcing from Chinese memory makers Yangtze Memory Technologies Co. (YMTC) and ChangXin Memory Technologies (CXMT) by Aug. 21.
For investors, memory chips are turning into a key cost variable for the technology sector in the second half of the year. They affect consumer electronics gross margins and the efficiency of cloud capex at the same time, while the supply side still shows no near-term sign of relief.