On Friday, Apple (AAPL.O) and Amazon (AMZN.O) added almost $175 billion to their combined market worth after positive earnings reinforced investor confidence in these companies’ ability to weather an economic slowdown.
While analysts emphasized that these companies are not immune to broader economic challenges, they added that a drop in consumer spending is unlikely to push them into the red, calling them “always trustworthy to buck the trend.”
Amazon’s stock climbed over 11% to $135.50 after the e-commerce behemoth anticipated positive third-quarter revenue. At the same time, Apple’s stock rose more than 3% after the company indicated demand for iPhones remained robust despite customers’ tighter spending.
“The numbers are excellent enough to support Apple’s stock, which has done significantly better in the current market collapse, further supporting the company’s’safe haven’ position when times are rough,” Investing.com analyst Haris Anwar said.
The stock market’s hyper-expansion in the last decade has been driven by high-growth and mega-cap corporations. Still, rising interest rates to combat decades-high inflation and a rapid rally in the dollar have taken their toll since the beginning of the year.
Earlier this week, positive earnings from Alphabet (GOOGL.O) and Microsoft (MSFT.O) soothed investors who had been burned by their stocks’ decline in the year’s first half.
Like much of the retail business, Amazon is bracing for a drop in consumer spending as individuals seek lower-cost necessities to tide them over until the economy improves.
The e-commerce behemoth’s brisk cloud business, along with an expansion of service offerings, is likely to mitigate the impact of rising expenses.
Paul Nolte, portfolio manager at Kingsview Investment Management, was more suspicious in light of warnings from certain large retailers, including Walmart (WMT.N)
