Transformational Innovation Opportunities (TRIO)

31 July 2026, 03:43 UTC Chief Investment Office GWM Investment Research

AI quick pulse: Amazon and Apple results - diverging reactions, part two Transformational Innovation Opportunities (TRIO): Artificial Intelligence Authors: Ulrike Hoffmann-Burchardi, Chief Investment Officer Americas and Global Head of Equities, UBS Financial Services Inc. (UBS FS); Kevin Dennean, CFA, CIO Equity Strategist, US Technology & Telecom, UBS Financial Services Inc. (UBS FS); Delwin Kurnia Limas, CFA, CIO Equity Strategist, UBS AG Singapore Branch; Achille Monnet, CIO Equity Analyst, UBS Switzerland AG; Allen Pu, CFA, CIO Equity Strategist, UBS AG Hong Kong Branch; Nikolaos Fostieris, Global Equity Strategist, UBS Switzerland AG; Xueqiong Huang, Equity Strategist, UBS AG Singapore Branch

• In a sequel to 29 July (please see AI pulse: Meta and Microsoft results – diverging reactions published 30 July 2026), diverging after-hours price action in Apple and Amazon shares mirrored their respective outlooks. Amazon shares traded sharply higher after solid 2Q26 results and 3Q26 guidance, with particularly strong results and commentary on AWS. In contrast, Apple shares were lower as broadly in-line June-quarter results were overshadowed by below-consensus September- quarter guidance.

• Amazon posted better-than-expected results and guidance, with solid performance across the board. We see three key takeaways from the results and the Source: Shutterstock call: 1) AWS accelerates, again; 2) Capital expenditures are rising; and 3) Management has framed the RoIC argument.

• Apple’s results highlighted strength in the company's hardware products, but the outlook was below expectations due to supply constraints, FX headwinds, and slower growth in Services. We see three key takeaways from the results and the call: 1) Demand is strong, supply is not; 2) Memory remains the key margin headwind; and 3) AI momentum is early, but building.

• Following the latest earnings releases and capex commentary from the Big Four hyperscalers, we raise our AI capex forecasts to USD 900bn for 2026 (+84% y/y) and USD 1.2tr for 2027 (+33% y/y). The upward revision is driven primarily by pricing, reflecting broad- based cost inflation across the AI server supply chain over the past several months. While our stronger 2027 capex outlook reinforces a constructive view on semiconductor and hardware demand, it also raises the hurdle for AI infrastructure spending to sustain positive growth into 2028.

This report has been prepared by UBS Financial Services Inc. (UBS FS), UBS AG Singapore Branch, UBS Switzerland AG, UBS AG Hong Kong Branch. Analyst certification and required disclosures begin on page 5. UBSFS accepts responsibility for the contents of this report. U.S. persons who receive this report and wish to effect any transactions in any security discussed in this report should do so with UBSFS and not UBS AG.

Transformational Innovation Opportunities (TRIO): Artificial Intelligence

In a sequel to Meta and Microsoft results reported on 29 July, networking consumption (consistent with comments diverging after-hours moves in Amazon and Apple shares from its hyperscaler peers). AWS also benefited from mirrored their respective outlooks. Amazon’s 2Q26 results strong demand for its proprietary silicon, including and commentary highlighted AWS acceleration, expanding Graviton and Trainium, as well as rapid growth in AI margins, and a growing backlog. Capex is rising, but we services such as Bedrock. think investors will underwrite this investment given the 2. Capital expenditures rising. 2Q26 capital expenditures strength in AWS. Meanwhile, Apple delivered a solid June- of USD 54.2bn were above the consensus forecast quarter beat, led by iPhone and Mac, but below-consensus of USD 49.4bn due to continued investment in AWS September-quarter guidance reflected supply constraints, FX and generative AI. Management raised its 2026 cash headwinds, slower Services growth, and rising memory costs capex expectation to approximately USD 220bn from rather than weaker demand. its prior view of USD 200bn. The increase is due to a combination of higher memory costs and continued Following the latest Big…