Apple and Amazon Results Pose Tech Rally’s Toughest Hurdle Yet

Results from Apple Inc. and Inc. after Thursday’s close represent the next big hurdle for the market’s tech-fueled rally, and it may be the hardest to clear.

Both stocks have been critical to the S&P 500’s advance this year, attracting investors with their relatively durable revenue streams and market dominance. But whether they can fuel further gains is in question, given they trade at lofty multiples, face headwinds in their core businesses, and have limited direct exposure to artificial intelligence — a key driver behind this year’s jump.

“At these valuations, multiples either need to come down, or earnings need to rebound in a very robust way, which might be difficult since a lot of AI excitement has been priced in,” said Irene Tunkel, chief US equity strategist at BCA Research. “But that remains a buzzword more than something that is moving the needle in terms of growth.”

Apple shares fell 0.5% on Thursday, while Amazon rose 0.9%. The Nasdaq 100 Index gained 0.2%.

Apple, Amazon Results Follow Strong Gains