📦 The Colonel’s bow-tie and Amazon’s forgotten business

Following last night’s earnings from Meta and Microsoft and last week’s earnings from Google and Tesla, tonight we get the last round of earnings from the Magnificent Seven as Apple and Amazon tell us how the quarter went. 

• The companies have taken very different approaches to the AI moment. Amazon, through its subsidiary AWS, has poured tens of billions and intends to pour hundreds of billions more into an AI buildout. Apple has ceded that data center race, but still has its bets on consumer products that stand to benefit from AI advancements. 

• The numbers are staggering; Amazon’s looking at $200 billion in capital expenditures for 2026, while Apple’s looking at $13 billion to $14 billion, an order of magnitude less. 

• Amazon, which is singlehandedly responsible for something like 30 percent of the combined AI infrastructure spend across Amazon, Microsoft, Meta, and Alphabet, is betting that that investment allows its cloud business to win the compute race. 

• Apple waved the white flag on multiple segments of the AI business, a somewhat humiliating retreat for a company whose Siri was relatively early to market. That demoralizing and embarrassing retreat has [checks note] sent them up nearly 24% year to date? While Amazon is flat, Meta’s down 11%, and Microsoft is down 19%? Interesting. 

Apple has also managed to ride the AI wave thanks to its Apple Silicon chips, which have been in high demand for Mac Minis and hardware that can host consumer-grade and self-hosted models, with many of those out of stock for weeks or months amid the RAM crunch. 

The Takeaway

Oh, wait, Amazon also runs a big store too, right? The AI conversation has been such a huge driver of stock movement over the past few quarters that at times we must remind ourselves that Amazon, the popular cloud services company, actually operates the second-largest retailer in America and the largest delivery provider by volume, seemingly as a side-hustle. Guess we’ll find out how that project’s going. Do you think Amazon, once a humble book store, would just have sold away all of those incredibly valuable AI training materials had they known their real value to the insatiable maw of AI training? Bet Jeff is really kicking himself over that. 

— Walt Hickey

• 📊 Fed: Following yesterday’s hold, the market is pricing in a higher chance that the Fed hikes rates by 25 basis points in September, which it rates at a 57% chance*. 

• 🎬 Oscars: “The Odyssey” is an early favorite to win Best Picture, with markets pricing in a 50% chance the movie wins. 

*Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.

That’s the percentage of the lyrics of BTS’s album Arirang that are English, meaning the band would not be eligible for the newly added awards category for best Asian pop music, which requires “substantial use” of an Asian language. That exclusion led the Korean band to announce they will not submit their work for consideration at the 2027 Grammys, where they would have been in the running for numerous awards, including album of the year.

• Q2 US GDP data. 

• Earnings from Apple, Amazon, Mastercard, Shell, Anheuser-Busch, Bristol-Myers Squibb, Altria.