CNBC’s Jim Cramer on Thursday dismissed the idea that big tech stocks could be “ridiculously expensive”.
“For the most part, earnings estimates have been way, way, way, way, way, way, way too low,” he said as part of his initial response to their September quarter results. “This is exactly what you would expect from best-of-breed companies that grow to their huge market cap every hour and minute of the week.”
Despite strong reports from four of the S&P 500’s most valuable components, only Alphabet, the parent company of Google, had increased its aftermarket inventory.
Below are Cramer’s reactions to each of her findings:
Alphabet shares rose double digits in the hours that followed after the company announced a sharp jump in earnings and double-digit sales growth. The company reported earnings of $ 16.40 per share on revenue of $ 46.17 billion for the third quarter when estimates were set at $ 11.29 billion and $ 42.90 billion, respectively.
“Alphabet, the parent company of Google, was the only company that did something very unusual: they delivered a huge top and bottom line beat, and that made the stock roar,” said Cramer. “I always expect Alphabet to somehow drop the ball and scare people, but not this time. That didn’t happen. … This is a new alphabet as of today.”
Amazon stock fell 1% after the company released quarterly results, though results were much better than expected. The online giant posted earnings of $ 12.37 per share, nearly double the expected $ 7.41, and had revenue of $ 96.15 billion versus a factset estimate of $ 92.78 billion.
“They wiped out the estimates,” said Cramer. “The only real flaw? While the forecast for the next quarter was strong, your forecast for operating income was a little light, which is why the stock fell a little after hours.”
Facebook stock was up 1% before falling more than 1% after the social media company released third-quarter numbers that beat Wall Street estimates. Facebook posted earnings per share of $ 2.71 and revenue of $ 21.47 billion, up from analyst forecasts of $ 1.91 billion and $ 19.8 billion, respectively.
“If you thought the boycott was hurting you, think again,” said Cramer. “Looks like your advertising business is on fire.”
Apple was down 5% in the aftermarket after posting a slight spike in its income statement in its fourth quarter report and choosing not to give investors a guidance for the current quarter ending in December. The company posted earnings of 73 cents per share and sales of $ 64.7 billion, up 1% year over year.
“IPhone sales have been weak, but you have to keep in mind that this was the final quarter before perhaps their most important iteration came out – the [iPhone] 12, four different models, “said Cramer.” However, based on the first five days of shipping data, CEO Tim Cook is optimistic. … I think the withdrawal here is an opportunity to buy. “
Disclosure: Cramer’s charitable foundation owns shares in Amazon, Facebook, Apple and Alphabet.