Amazon (AMZN) – Get Report shares tumbled more than 7% on Friday after the online retail giant posted earnings that were better than expected but sales that missed analysts’ forecasts as well as weak guidance for the third quarter.
On a post-earnings conference call, Amazon CFO Brian Olsavsky blamed tough year-over-year comparisons to its business during COVID-19 lockdowns as consumers flocked to the online retailer during the height of the pandemic and stay-at-home orders.
“We are big believers that the pandemic pulled forward e-commerce adoption, but what a revenue miss and a weaker-than-expected outlook also suggest is that demand was greatly pulled forward, too,” the AAP team said.
Cramer told investors that a tip-off is when the analyst keeps a buy rating, but doesn’t raise the price target. In Amazon’s case, a number of analysts adjusted their forecasts and price targets for the online retail giant.
Over on Real Money Cramer parses earnings reports and market volatility. In his column mid-week, What a Day to Celebrate Not Being Short the Stocks I Like, he says, “I’m grateful for those who say that they like to short everything I like because crow is a dish best tasted cold, and are they ever eating a ton of it.” Get more of his earnings insights and trading ideas on Real Money.
JPMorgan maintained its overweight rating while lowering its price target to $4,100 from $4,600 per share. However, analyst Doug Anmuth sees Amazon “still running at a compound annual growth rate of 25%-30%, even while Wall Street estimates come down.
“Price targets lowered en mass for Amazon,” Cramer tweeted Friday. “As I said last night on @MadMoneyOnCNBC when you get PT’s lowered do not go near it short-term and let the flippers get out.”
Amazon adjusted its return-to-office plans amid the spike of COVID-19 cases due to the highly contagious Delta variant.
Alphabet’s Google (GOOGL) – Get Report is the latest company to join the list of big names to postpone the return to office date of employees. The tech giant said that it has extended the work-from-home policy through October 18.
Earlier, Apple (AAPL) – Get Report reportedly postponed its return to work from early September to Oct. 1 and social media giant Twitter (TWTR) – Get Report shut down its offices in New York and San Francisco, pausing the re-openings. The company had re-opened those locations on July 12.
Here is a breakdown list of the technology and FAANG stocks to watch right now based on their performance over the past week:
Facebook (FB) – Get Report easily beat earnings and revenue expectations. However, management’s guidance rattled investors, which triggered Friday’s decline, wrote TheStreet’s Bret Kenwell. The social media company has been a huge winner so far this year, up 36.5% going into Thursday’s session. While the quarter was solid, the guidance was not, which does leave us with some risk in the stock, according to Kenwell. However, the trend is still to the upside, so until that changes — perhaps it becomes a downtrend or maybe it results in some sideways chop — bulls will be hesitant to alter their strategy.
Apple Inc. (AAPL) – Get Report moved higher this past week after the world’s most valuable tech company filed plans to raise billions in the bond market that could be used to boost shareholder returns. In papers filed with the Securities and Exchange Commission, Apple said it may sell four different notes, ranging in maturities from seven to 40 years, with proceeds directed to “general corporate purposes, including repurchases of our common stock and payment of dividends under our program to return capital to shareholders, funding for working capital, capital expenditures, acquisitions and repayment of debt.”
Cramer said a successful long-bond offering, priced at a yield premium to U.S. 30-year Treasury bonds, would allow Apple to “buy back an insane amount of stock.”
Pinterest (PINS) – Get Report shares were hammered on Friday. Shares were under pressure Thursday evening following disappointing earnings and that weakness continued into Friday’s premarket trading session. Ironically, the San Francisco social media services company posted excellent top-and bottom-line results. However, user growth was very disappointing and that’s spooking Wall Street.
Shopify (SHOP) – Get Report reported second-quarter earnings that blew past analysts’ forecasts and revenue that topped $1 billion for the first time as ongoing post-pandemic online shopping demand continued to drive demand for the company’s e-commerce software platform and services.
Shares of Atlassian Corp. (TEAM) – Get Report were rising 24% Friday as the Australian workflow management software company reported fourth-quarter results that topped analyst estimates. Atlassian, which competes with the likes of Salesforce (CRM) – Get Report, Slack (WORK) – Get Report, and Microsoft Teams (MSFT) – Get Report, surpassed 200,000 customers and $2 billion in revenue during the fiscal year.
Microsoft shares were rising slightly this past week after the software giant posted fiscal fourth-quarter earnings and sales that topped expectations, eliciting a positive reaction from analysts. The company received a share-target price increase from Jefferies analyst Brent Thill, who sees a solid earnings report from the tech giant on Tuesday. He raised his target to $335 from $310 on the stock and kept his buy rating for the software company.
Amazon shares sank after the online retail giant posted stronger-than-expected second-quarter earnings, boosted by Prime Day and Web Services, but overall revenue fell shy of Wall Street’s forecasts. Revenue rose 27.2% from a year ago to $113.1 billion but fell short of analysts’ estimates of $115.2 billion.
Netflix missed on earnings expectations despite reporting global net subscriptions ahead of estimates. The streaming giant reported earnings of $2.97 a share on revenue of $7.34 billion. Analysts were expecting the company to report earnings of $3.18 a share on revenue of $7.32 billion.
“If you focus on Netflix, you’re missing the bigger picture of corporate America doing very well,” said Cramer, who maintained he’s been “a huge backer of Netflix for ages.”
Cramer told Action Alerts PLUS senior analyst Jeff Marks that the company’s earnings call didn’t make Netflix seem like the growth stock it has been in the past.
Alphabet reported strong results from a bounce-back quarter that lapped the company’s results from a year ago and topped analysts’ estimates.
“My sources at the company are indicating that they struggled to restrain their enthusiasm,” Cramer said. “That it was that great a quarter.” He explained that Google Search, the company’s biggest moneymaker, was “amazing,” as revenue jumped to $35.85 billion from $21.32 billion a year ago. Advertising revenue overall, including YouTube and other streams, totaled $50.44 billion. “For the fraction of the cost of TV,” Cramer said of YouTube, “you can reach 70% of the people that TV doesn’t have.”
Cramer also said that the stock will go down “and then the bears will say travel is going to go down… because of the delta variant and maybe the other letters all the way to omega…So you can always craft a story about why a stock is down,” he said. “It’s very hard to refute when what you’re really seeing is a group move against tech.”
Salesforce, Microsoft, Facebook, Apple, Amazon, PayPal and Alphabet are holdings in Jim Cramer’s Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells these stocks? Learn more now.