Apple's Sales Rebound Amid AI Market Shake-Up

Some good news have been delivered to jittery financial markets, as sales at Apple got better this spring, overcoming weakness in China.

The tech giant said it took in $85.8bn (£67.3bn) in revenue over the three months to June, up 5% year-on-year - a return to growth after a slump at the start of 2024.

The report came following the three major share indexes in the US, after hours of trade.

Shares in Intel plunged by more than 19%, as the chip-maker responded to a sales slump with a cost-cutting plan that includes more than 15,000 job cuts.

Amazon shares were also down more than 4% after the e-commerce giant reported sales grew 10% to $148bn.

Overall, the Dow Jones Industrial Average dropped 1.2%, the S&P 500 slipped almost 1.4% and the Nasdaq dropped 2.3%.

Bets on AI have shaken up the markets recently. Investors are worried about the high costs of AI investments, and companies falling behind in the AI race are taking a hit.

Intel is one of the companies losing favor as businesses switch to rival Nvidia, known for its powerful AI chips.

Intel reported a 1% drop in sales for the three months to June and warned that the second half of the year would be worse than expected. CEO Pat Gelsinger told staff that revenues haven't grown as hoped and that they haven't fully benefited from trends like AI. He said the company needs "bolder actions" and a fundamental change in operations.

In contrast, Apple says it’s well-positioned to benefit from AI. The company has introduced new AI-powered features called "Apple Intelligence" to developers in the US. These features allow iPhone users to record and transcribe phone calls, create personalized emojis, and interact more naturally with Siri, among other improvements.

Apple plans to roll out these features more widely later this year, but only on newer devices. CEO Tim Cook said the new features give customers another reason to upgrade their devices. He expects growth to continue and said the company remains very optimistic about AI, committing to significant investments in the technology.

Over the April to June period, sales of iPhones slipped 1%, a drop outweighed by increased sales of Macs and iPads.

Apple also reported an all-time record in revenue from its services division, which includes offerings such as Apple Pay and Apple News.

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