Shares of United Parcel Service plunged more than 17% Thursday after the company issued weak revenue guidance for the year and said it planned to cut deliveries for Amazon, its largest customer, by more than half.

The shipping giant said in its fourth-quarter earnings report that it “reached an agreement in principle with its largest customer to lower its volume by more than 50% by the second half of 2026.”

At the same time, UPS said it’s reconfiguring its U.S. network and launching multi-year efficiency initiatives that it expects will result in savings of approximately $1 billion.

UPS CEO Carol Tome said on a call with investors that Amazon is UPS’ largest customer, but it’s not the company’s most profitable customer. “Its margin is very dilutive to the U.S. domestic business,” she added.

“We are making business and operational changes that, along with the foundational changes we’ve already made, will put us further down the path to become a more profitable, agile and differentiated UPS that is growing in the best parts of the market,” Tome said in a statement.

Amazon spokesperson Kelly Nantel told CNBC in a statement that UPS had requested a reduction in volume “due to their operational needs.”

“We certainly respect their decision,” Nantel said in a statement. “We’ll continue to partner with them and many other carriers to serve our customers.”

Amazon said before the UPS announcement that it had offered to increase UPS’ volumes.

UPS forecast 2025 revenue of $89 billion, down from revenue of $91.1 billion in 2024. That’s well below consensus estimates for 2025 revenue of $94.88 billion, according to analysts polled by LSEG.

For the fourth quarter, UPS missed on revenue, reporting $25.30 billion versus $25.42 billion analysts anticipated in a survey by LSEG.

Amazon has long relied on a mix of major carriers for deliveries, including UPS, FedEx and the U.S. Postal Service. But it has decreased the number of packages sent through UPS and other carriers in recent years as it looks to have more control over deliveries.

Amazon has rapidly built up its own logistics empire since a 2013 holiday fiasco left its packages stranded in the hands of outside carriers. The company now oversees thousands of last-mile delivery companies that deliver packages exclusively for Amazon, as well as a budding in-house network of planes, trucks and ships. By some estimates, Amazon’s in-house logistics operations have grown to rival or exceed the size of major carriers.

UPS has, for its part, taken more aggressive cost-control measures, including catering to more profitable delivery customers. In recent quarters, UPS has benefited from an influx of volume from bargain retailers Temu and Shein, which have rapidly gained popularity in the U.S.

Last January, UPS laid off 12,000 employees as part of a bid to realize $1 billion in cost savings.

Apple reports December-quarter earnings Thursday after the bell. 

The December quarter is Apple’s largest of the year, partially due to the holiday shopping season and also because it is the first full quarter of new iPhone sales.

While analysts are not worried about the company’s performance in the December quarter, many of them will look for what Apple signals about how its March quarter is shaking out.

Supply chain data points suggest Apple’s sales in China are weakening, and Apple Intelligence, the company’s suite of artificial intelligence features, is not available in Chinese yet.

“Specifically, iPhone 16 demand is not amplified by the introduction of iOS 18 and its Gen AI features. In fact, paradoxically, somehow demand is actually softer,” wrote Loop Capital analyst Ananda Baruah in a note earlier this month, downgrading Apple to hold. “We’re again looking for iPhone units to decline for the fourth consecutive year.”

Apple does not publish its unit sales, and does not give traditional guidance. New Chief Financial Officer Kevan Parekh, who assumed the role earlier this month, will likely give investors a few data points on Thursday’s call that analysts can use to estimate earnings per share and revenue for Apple’s March-quarter performance.

LSEG estimates Apple’s revenue will grow on an annual basis at about 3.8% to $124.13 billion. Apple said in October that it expected “low- to mid-single digit” sales growth during the quarter.

One of the biggest things analysts will be watching for is if Apple’s mainland China sales suggest that consumers in the country are shifting their preferences to locally made and designed devices.

“We believe that a major driver of growing competition within the smartphone market is due to growing preference for domestic brands within China,” wrote Goldman Sachs analyst Michael Ng in a Jan. 23 note.

One bright spot for Apple could be its services business, which includes products ranging from device warranties to the Apple TV+ streaming service. Barclays analysts said in a note earlier this month that services could grow as much as 14% on an annual basis, which could offset lower iPhone sales.

Apple is expected to be questioned over its plan for Trump’s proposed tariffs and its overall AI strategy.

Here is what to expect from Apple in the December quarter, per LSEG consensus estimates:

• Earnings per share: $2.35
• Revenue: $124.13 billion

Analysts are expecting guidance for the March quarter of $1.66 in earnings per share on $95.46 billion in revenue.

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OpenAI on Thursday said the U.S. National Laboratories will be using its latest artificial intelligence models for scientific research and nuclear weapons security.

Under the agreement, up to 15,000 scientists working at the National Laboratories may be able to access OpenAI’s reasoning-focused o1 series. OpenAI will also work with Microsoft, its lead investor, to deploy one of its models on Venado, the supercomputer at Los Alamos National Laboratory, according to a release. Venado is powered by technology from Nvidia and Hewlett-Packard Enterprise.

OpenAI CEO Sam Altman announced the partnership at a company event called “Building to Win: AI Economics,” in Washington, D.C.

According to OpenAI, the new partnership will involve scientists using OpenAI’s technology to enhance cybersecurity to protect the U.S. power grid, identify new approaches to treating and preventing diseases and deepen understanding of fundamental mathematics and physics.

It will also involve work on nuclear weapons, “focused on reducing the risk of nuclear war and securing nuclear materials and weapons worldwide,” the company wrote. Some OpenAI researchers with security clearances will consult on the project.

Earlier this week, OpenAI released ChatGPT Gov, an AI platform built specifically for U.S. government use. OpenAI billed the new platform as a step beyond ChatGPT Enterprise as far as security. It will allow government agencies to feed “non-public, sensitive information” into OpenAI’s models while operating within their own secure hosting environments, the company said.

OpenAI said that since the beginning of 2024, more than 90,000 employees of federal, state and local governments have generated over 18 million prompts within ChatGPT, using the technology to translate and summarize documents, write and draft policy memos, generate code and build applications.

The government partnership follows a series of moves by Altman and OpenAI that appear to be targeted at appeasing President Donald Trump. Altman contributed $1 million to the inauguration, attended the event last week alongside other tech CEOs and recently signaled his admiration for the president.

Altman wrote on X that watching Trump “more carefully recently has really changed my perspective on him,” adding that “he will be incredible for the country in many ways.” OpenAI is also part of the recently announced Stargate project that involves billions of dollars in investment into U.S. AI infrastructure.

As OpenAI steps up its ties to the government, a Chinese rival is blowing up in the U.S. DeepSeek, an AI startup lab out of China, saw its app soar to the top of Apple’s App Store rankings this week and roiled U.S. markets on reports that its powerful model was trained at a fraction of the cost of U.S. competitors.

Altman described DeepSeek’s R1 model as “impressive,” and wrote on X that “we will obviously deliver much better models and also it’s legit invigorating to have a new competitor!”

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