CNBC's MacKenzie Sigalos and Steve Kovach join 'Squawk on the Street' with the latest news earnings from Amazon and Apple.

Amazon reported a 12 percent surge in shares, driven by a strong performance from its AWS cloud division, which grew over 20 percent and generated $33 billion in revenue. CEO Andy Jassy emphasized sustained demand across AI and traditional workloads, with significant investments in in-house AI chips and new data centers, positioning Amazon for a potential $200 billion-plus quarter.

Apple's results were led by strong demand for the iPhone 17, with overall iPhone revenue up 6 percent despite supply constraints. Services revenue also rose 15 percent, surpassing $100 billion for the fiscal year. While sales in China declined, Apple projected double-digit iPhone growth and its best December quarter ever, with a major AI update to Siri planned for the following year.

Amazon and Apple report earnings

Let's start though with the results from those two tech mega caps. Mackenzie Sagalas is covering Amazon stocks spike this morning. Steve Kovac has got the Apple story for us as well. Mackenzie we'll start with you on Amazon. Hey David. So Amazon shares are popping 12 percent all thanks to its cloud comeback story. A.W.S. grew just over 20 percent its fastest pace since early 2022 and beat even the most bullish whisper numbers with thirty three billion in revenue. That helped ease concerns that Amazon was slipping and the cloud wars especially after Google and Microsoft posted even stronger year over year percentage growth. Now CEO Andy Jassy he says that demand is strong across both A.I. and traditional workloads and that Amazon is scaling compute to meet it. Now he told investors he expects A.W.S. to sustain this momentum for a while. Ting the company up for its first ever two hundred billion dollar plus quarter in Q4 backlog. That's now at two hundred billion dollars not including October's unannounced deals which apparently exceeded the entire Q3 volume. So this wasn't just a rebound. It was a referendum. Amazon needed to prove that its massive infrastructure bets are paying off. It spent thirty four billion dollars in Q3 alone and now expects to hit one hundred and twenty five billion in capex for the year. More than it's projected operating income. A big chunk of that is going into its in-house A.I. chips and new hyperscale campuses like Project Rainier and eleven billion dollar data center that it just built to power models exclusively for anthropic. This is Amazon's answer to open a Stargate and the chief takeaway across big tech. The winners aren't just the ones spending the most. They're the ones showing that it is working. Alphabet and Amazon are seeing that halo effect. Microsoft it's still growing fast but saw its stock dip and then meta. Despite a revenue and earnings beat it logged its worst drop in three years as investors questioned whether its A.I. push will ever turn into profit. Guys Mac how would you classify sort of the tone of executives on the call. Obviously several days ago Amazon announced these layoffs but then this report was so blockbuster. Did they address that at all and how it fits in with the bigger picture the sentiment the tone of the call in the company itself right now. I mean what's fascinating and kind of this connective tissue that links the alphabet and Amazon bullish reaction we've seen is that they both both have an in-house silicon program that basically can their in-house A.I. chips compete with NVIDIA. And that's a really helpful upside when you think about the 70 percent plus gross margin that NVIDIA has on sales. And so they're able to undercut on price. And that's something that Jesse keeps returning to. Amazon CEO Andy Jesse talking about the fact that their chips are 30 to 40 percent cheaper than the models out there from the likes of NVIDIA. And that's part of the value proposition they offer A.I. customers specifically. And David one thing that I've been keeping in mind is unnamed October deals that they signed. You broke on our air earlier this week that Microsoft no longer has right of first refusal with open A.I. compute deals. And that's one of their big customers they don't have on the list so far. So I wonder if we can break that one together. All right. We'll work on it. Sure. Kenzie. Yeah. Goldman points out the backlog in October already larger than the total deal volume for Q3. It's an amazing quarter out of Amazon. McKenzie thanks. Let's turn to Apple is now dipped lower after an early pop. iPhone 17 demand driving those results. Our Steve Kovac talked to Tim Cook and joins us with those comments this morning. Hey Steve. Yeah. Carl the message here is the iPhone 17 is a hit or at least more of a hit than we've seen the last couple iPhone cycles. Now iPhone for the quarter September quarter didn't miss revenue estimates but it was up 6 percent. And Tim Cook actually told me they could have sold more iPhones if they weren't supply constrained from strong demand. That actually applied to the iPhone 16 which the last bit of sales happened there in the quarter. Now a big highlight here services were up 15 percent and they surpassed 100 billion dollars for the fiscal year for the very first time. However China was a bit of a sore spot. Again it was down three and a half percent. But there was guidance that surprised big time to the upside. They're now expecting top line revenue growth between 10 and 12 percent and double digit growth for the iPhone. And China is expected to grow in the December quarter too. You put all that together and Apple is now predicting its best December quarter ever for overall sales and the iPhone. So what do we look at next. Of course it's artificial intelligence. Cook did tell us that the big A.I. update to Siri is on track to launch next year and gave us some hints at the strategy. They're partnering with other A.I. leaders instead of building at all in-house on their own. Here's what he told me. Quote in terms of the integration we've integrated with Chachi B.T. and our intention is to integrate with more people over time. So who are the likely candidates. Google Gemini. Of course that kind of opened up after that big D.O.J. case. And then there's Anthropos Claude as well guys. This is all really interesting Steven. And I was reading through sort of the commentary to Tim Cook or to you from Tim Cook. And I know you brought up the supply constraint. Is that then I guess the reason why we saw the disappointment in the iPhone revenue in this quarter despite this bullish remarks about what is to come. What was the supply constraint there. Can you explain that a little. Yeah. And in fact I asked him that directly. Was it something else. He just said no. Just the man was too strong for us to catch up. What was interesting there Courtney is keep in mind this September quarter is only like nine or 10 days of iPhone 17 sales because it went on sale at the end of September. He even said the 16 was supply constrained even at the end of the life for the iPhone 16. People were still buying it right up to the very end. So just demand across the board and that's going to translate over into the December quarter. I'll also note that iPhone air was delayed by a couple of weeks in China. That could have impacted things as well. Tim Cook told me that's going to pull forward as well. And he sees that kind of catch that demand kind of catching up now that it's on sale in China. Really interesting stuff. Great job with Tim Cook there obviously shares down four tenths of a percent. But some of the the bullish remarks Tim Cook saying it was off the chart and then a run at the table from the CFO talking about services. Thank.

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