CNBC’s Jim Cramer on Thursday reacted to the quarterly reports that four of the five largest publicly traded companies posted after markets closed.
Shares of Amazon, Apple, Facebook and Alphabet, with a combined market value of more than $4.8 trillion as of Thursday’s close, are all up in the aftermarket after each company topped Wall Street estimates in a quarter consumed by the coronavirus pandemic that has disrupted global economies.
“These big tech stocks have been roaring because they either benefit directly from the pandemic or they’ve figured out how to thrive in spite of it,” the “Mad Money” host said.
One day prior, the chief executives of each tech titan were summoned before Congress to testify on antitrust claims. Cramer called the House antitrust subcommittee the “greatest stock-picking research firm in the world” after lawmakers on both sides of the aisle grilled the company heads on their business practices and outsized dominance in their respective markets.
“When I’m searching for long-term investments,” Cramer said, “I dream of finding companies that [are] so powerful [and] so strong, that they end up being hauled in front of Congress for destroying their competition fair and square.”
Amazon shares surged more than 5% in the aftermarket after the e-commerce giant reported earnings of $10.30 per share on revenue of $88.91 billion, well above the $1.46 per share and $81.56 billion numbers, respectively, analysts were looking for.
“They weren’t even trying to have an incredibly profitable quarter. They spent aggressively to build capacity for the stay-at-home economy, and to keep their employees safe,” Cramer said. “As for the next quarter, Amazon gave you a blowout forecast. The stock’s on fire.”
Apple stock shot up about 6% after posting a blockbuster report and announcing a four-for-one stock split after the bell. The company recorded $59.69 billion on the top line, compared to analyst estimates of $52.25 billion, and $2.58 per share on the bottom line, a 54-cent beat.
“While Apple didn’t give us a forecast for the next quarter, they did give us … a four-for-one stock split, which should make this one a lot more enticing to home-gamers who might be scared away from a $400-plus price tag,” the host said. “Many other companies should actually watch what [CEO] Tim Cook does here and stop watching what Warren Buffett does. Do what Tim Cook does. It’s another reason why Apple is zooming after hours.”
Shares of Facebook rallied above 6% after besting analyst estimates in the second quarter. The social media giant reported earnings of $1.80 per share, when Wall Street was looking for $1.39, on revenues o $18.69 billion, more than $1 billion above expectations.
“After all the sturm und drang about major advertisers boycotting the platform, Facebook shot the lights out,” Cramer said. “Even better, July’s going strong. Millions of small businesses need Facebook. Instagram Shops is a gigantic hit. This is a small- and medium-sized business juggernaut. No wonder the stock’s flying in after-hours trading.”
Google-parent Alphabet is the laggard here with its stock up less than 1% in extended trading. The online behemoth beat on the top and bottom lines, but the company saw revenues decline for the first time in its history. Alphabet brought in $38.30 billion in revenue and produced profits of $10.13 per share, while analysts predicted $37.37 billion and $8.21, respectively.
“Their numbers were substantially better than expected, even as their core advertising business took a major hit,” the former hedge fund manager said. “The stock barely budged in response, but I think that’s because Alphabet’s management is so non-promotional.”
Disclosure: Cramer’s charitable trust owns shares of Amazon, Alphabet, Apple and Facebook.