Picture generated by Meta AI
The past few days had seen the announcements of quarterly results for the “Triple A” companies: Apple, Alphabet and Amazon, with all three beating their revenue and earnings per share (EPS) estimates. Here are the revenue and EPS summaries for each company (Fig.1):
Company | Revenue (Actual, in billions) | Revenue (Estimated, in billions) | EPS (Actual) | EPS (Estimated) |
Apple | 102.47 | 102.24 | 1.85 | 1.77 |
Alphabet | 102.35 | 99.89 | 3.10 | 2.33 |
Amazon | 180.17 | 177.80 | 1.95 | 1.57 |
Fig.1: Revenues and EPS of the three companies. All figures are denominated in United States Dollars (USD). Data sourced from CNBC.
In addition to surpassing both revenue and EPS estimates, the companies are signalling a positive outlook for the future. Expectations are high for increased revenues in the upcoming quarter and a potential rise in capital expenditures heading into 2026. This anticipated growth is primarily driven by the ever-expanding influence of artificial intelligence (AI) across products, applications, and infrastructure.
Alphabet and Amazon: Cloud Expansion and AI Investment
Alphabet and Amazon, alongside Microsoft, form the leading trio of global cloud providers through their platforms—Google Cloud Platform, Amazon Web Services, and Microsoft Azure. These companies have reported significant revenue increases in their cloud segments, with Alphabet experiencing a 34% rise and Amazon seeing a 20.2% jump. This upward trend, coupled with plans for substantial capital investment, underscores the projected growth of AI within their operations.
However, this rapid expansion has prompted some investors and analysts to voice concerns about a potential bubble forming in the AI sector, particularly noting the circular deals occurring among major AI players. Assessing the true stage of the AI lifecycle is complex, as factors such as technology, adoption, execution, and tangible outcomes often progress at different rates, sometimes leading or lagging each other. A key issue is whether the significant capital being allocated to make cloud services AI-ready will ultimately be accretive. Depending on how these elements align, there is a risk that the combination of factors could result in periods of over-supply and under-demand for cloud infrastructure, potentially triggering a "bubble popping" scenario.
Despite these concerns, longer-term indicators suggest that "AI is here to stay”. While AI technology has existed for some time, public awareness surged with the introduction of ChatGPT. This milestone sparked the emergence of additional AI-powered applications, some of which have already achieved success in user adoption and are likely to become significant sources of revenue in the future.
Apple: Regional and Product Segment Trends
While Apple has reported a year-on-year sales decline in the Greater China region and in the "Wearables, Home and Accessories" product category (such as Apple Watch and AirPods), other geographical segments and product lines are experiencing growth in revenue1. The company remains optimistic that demand for the newly released iPhone 17 will help reverse the downward trend in Greater China during the current quarter.
Historically, the first quarter of Apple’s fiscal year—from October to December—has generated strong revenues, driven in part by holiday season sales, including the Christmas period. These seasonal factors typically contribute to an uptick in the wearables segment, which are popular as gifts.
Furthermore, improvements to Apple Intelligence, including the integration of ChatGPT, are expected to serve as a significant catalyst for Apple’s future growth, given the company’s vast installed base of devices and loyal users. While other brands have already introduced AI capabilities in their products, Apple’s strong customer loyalty remains a key factor likely to fuel the company’s next phase of expansion.
Disclosure
The Bedokian is directly vested in Apple, Alphabet and Amazon.
1 – Apple reports fourth quarter results. Apple. 30 Oct 2025. https://www.apple.com/newsroom/2025/10/apple-reports-fourth-quarter-results/ (accessed 1 Nov 2025)
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