CNBC's Jim Cramer on Thursday rejected the idea that Big Tech stocks may be "ridiculously expensive."
After sifting through the earnings reports posted by Amazon, Alphabet, Apple and Facebook, the "Mad Money" host said the idea is "insane."
"In most cases, the earnings estimates were way, way, way, way, way, way, way too low," he said as part of his first reaction to their results from the September quarter. "That's exactly what you'd expect from best-of-breed companies that are growing into their enormous market capitalizations every hour, every minute of the week."
Despite strong reports from four of the most valuable components on the S&P 500, only the stock of Alphabet, the parent of Google, was up in the aftermarket.
Below are Cramer's reactions to each of their results:
Alphabet
Alphabet shares surged double digits in the after hours after the company announced a big earnings beat and double-digit revenue growth. The company reported earnings of $16.40 per share on revenue of $46.17 billion in the third quarter, when estimates were pegged at $11.29 and $42.90 billion, respectively.
"Alphabet, the parent of Google, was the one company that did something very unusual: They delivered a huge top- and bottom-line beat, and that sent the stock roaring," Cramer said. "I always expect Alphabet to somehow drop the ball and scare people, but they didn't this time. That didn't happen. ... This is, as of today, a new Alphabet."
Amazon
Amazon stock dipped 1% after the company announced quarterly numbers, despite having results that were much better than expected. The online giant made a profit of $12.37 per share, nearly twice the $7.41 that was expected, and brought in $96.15 billion in sales, against a Factset estimate of $92.78 billion.
"They obliterated the estimates," Cramer said. "The only real blemish? While the guidance for the next quarter was strong, their operating income forecast was a little bit light, which is why the stock got dinged a bit after hours."
Facebook shares moved 1% higher before trading more than 1% under after the social media company released third-quarter numbers that topped Wall Street estimates. Facebook produced $2.71 of earnings per share and $21.47 billion in revenue, against analyst forecasts of $1.91 and $19.8 billion, respectively.
"If you thought the boycott would hurt them, think again," Cramer said. "Looks like their advertising business is on fire."
Apple
Apple slid 5% in the aftermarket after posting a slight beat on the top and bottom lines in its fourth-quarter report and choosing not to give investors guidance for the current quarter that ends December. The company showed earnings of 73 cents per share and revenue of $64.7 billion, up 1% from a year ago.
"IPhone sales were weak, but you've got to keep in mind that this was the last quarter before, maybe, their most important iteration comes out — the [iPhone] 12, four different models," Cramer said. "Based on the first five days of shipping data, though, CEO Tim Cook is feeling optimistic. ... I think the pullback here is a buying opportunity."
Disclosure: Cramer's charitable trust owns shares of Amazon, Facebook, Apple and Alphabet.
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October 30, 2020 at 05:57AM
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Cramer reacts to Amazon, Alphabet, Apple and Facebook earnings - CNBC
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