One obviously will be iphone revenue, it is 26 billion, basically in line with what the street was looking for it is down 12 , but it is an improvement from q2. Remember, it was down 17 . I had a chance to catch up with ceo tim cook i asked what kind of impact the Trading Program was having there. Remember, one big roll here for the iphone franchise, why it is facing challenges, the replacement cycle is getting longer i asked cook is the tradein program impacting that at all. He said it was, it was a key reason for the sequential improvement. Services will be in focus, 11. 5 billion. Though apple has the onetime litigation settlement. It is up 15 from the comparable figure a year ago. I did ask cook about some of the new services on the way like the new Video Streaming Service and i asked him, melissa, how he will judge the service cook telling me the most important thing is, one, the product, and, two, the number of subscribers, whether we are going to announce it i dont know we only want to make the audience and, secondly, the audience we dont expect to have the biggest nature finally i think a theme on the call is wearable, Home Accessories clocked in at 5. 5 billion as a segment better than expected. Wearables alone up over 50 . I will hop on the call and bring you more headlines as they come. Melissa, back to you. Thanks, josh lipton, in cupertino. Guy adami, we go with apple here it is a great quarter here is what i mentioned josh mentioned margins Gross Margins for the company were spot in line. I guess it is okay news. The really good news, services came in close to 70 the higher margin business, now services is 21. 2 of the overall revenue mix. Thats a really good thing there are some things you can nitpick with yes, wearable is much better, iphones maybe a slight disappointment the guidance is great. How do you trade the stock at 2. 17 and change . It is coming up against the level we saw last year august the high was 227 1 2 or so does it fail here . My sense is it might be in for a pause. Expectations were low going into particularly the Revenue Services number. Remember, it was a stock down 40 last year, it was down 20 in may so the response here i think is very telling of a bar being very low. When i look at the action here, getting above 215 after hours is a breakout i think it will give a run at the old high you think i think 233 is the number when did the semis peak . Last january with the semis giving us the tale the whole time that apple is in good hands i think they were. The Services Number when you consider where the comp is, it is actually in line and very good the guide is the impressive part of this. The bears will say, hey, you went from 16 you went from 19 to 16 to 13 sequin shell on Services Bottom line, it is growing off a now larger base than it was off a tough comp i get back to the blended multiple here. I dont think it is a stretch to begin to look at the company as three different companies, but certainly too you have a hardware component which is probably eight to ten times. But when you get into services at 25 times, a blended multiple at 17 times puts you 240 on this company right now. That to me is not a stretch. I think were getting to a place where the predictability and then we have the Service Offerings coming down the pike i do think that the apple news i think that the apple music live and some of the things that will mean something for services are excited. When you dream of blended multiple are you doing hardware will be about threequarters and you have to and that comes outto you have to be weighted. What i think is interesting is the guidance. This company, they do care about their earnings and what they project. They really do seem to, right . This to me seemed a quarter that was not that important it wasnt a makeorbreak quarter i dont think. For them to put out strong guidance like that, they must feel very secure in that guidance thats sort of interesting to me so i think that, you know, the 5g transformation is really going to be the story for a while. Im long i like it. It is not a huge position. I think this is theres a lot to like in this here the call, lets hear some more color and some nuance, but theres a lot to like here certainly enough to stay long at the moment. And the other two wild cards come down. You mentioned last night, you know, what is going on with the situation with the china deal, which if you look at President Trumps tweets today an indication that maybe were not as far along as the market would hope the market doesnt seem to care, by the way, thats number one. The whole doj thing, i dont necessarily thing that apple is in the crosshairs but they could be Collateral Damage i think the ones that should be worried are amazon and facebook and, quite frankly, both are trading that way post earnings but apple might get caught up in the crosshairs of this as well. Well, Services Growth as a percentage of revenue as you rightly point out, does it make them more of a target for any sort of regulatory action, particularly when theyre the headlines in the wall street journal, for instance, the app store when you do a search, you know, most of the top search results come back apple apps that are revenue generators for the company . I think that apples approach to services and hardware is one of enabling technology and enhancing experience for the consumer im sure it is taken straight out of one of their advertisements but the bottom line is when i look at their Services Business the only place i think theyre vulnerable is the app store has been seen as a place essentially trying to crush alternative avenues. But i think the Developer Community is really the one that is going to have the final say on that, and a lot of people have said apple has just been suffering because the Developer Community is looking for alternatives that alone will solve this issue. It is not enough to push apple close to where the other guys are in my view. After hours sessions high on apple, 4. 6 . Lets get to loup venture founder and fast money friend gene munster what is your initial take . Credit to apple they proved once again the critics wrong, you go down the line, whether it is revenue, china, wearables, profitability, the guidance, all ahead of expectations i want to put a finer point on the guidance if you take a typical beat that implies theyll grow revenue by 2 in the september quarter, that will be the first time in threequarters or four quarters or first time in a year they will have grown revenue but it is beyond the september quarter. The real tell here is if we start to fast forward into december, the comps get much easier so i think this is going to be a turning point to the stock given how easy it gets for the first threequarters of next year and separately 5g coming it seems to be clear sailing i suspect theres going to be a lot of analysts who will be ringing their hands over what is the proper multiple for apple and this multiple will continue to inch higher in the year to come. We were just talking about that as well, gene tim was pointing out if you do a blended multiple, you take the hardware multiple, the services, multiple what do you come up with i think a reasonable multiple would be somewhere between 20 and 25 times so lets pick that midpoint. As a blended, as a blended . As a blended as an overall multiple im basing that on if you just think about what the Sustainable Growth is with the buy back, you should have a growth similar to googles growth will be. Thats a similar multiple where google trades at if you think of apple as just a consumer staple, think about Companies Like cocacola i realize it is far outside what a typical tech investor thinks about, but that trades a declining business that trades at a low 20s multiple. I dont think it is a stretch. We will have a camp that will preach religiously this multiple cannot break out of 15 times, but, unfortunately, if you look at the roadmap for the next several quarters, ill put a stake in the ground and say it will be easier for apple for the next call at six quarters. I think it is an interesting comparison to cocacola. Many would say and argue that coke shouldnt be at the multiple it is trading at right now and should be lower. Putting that aside, gene, as we enter the Conference Call period, what are the outstanding questions on your mind i think i want to learn more about why they guided up again, that 2 guidup was in the face of a tough comp the comp in september of 2018 was plus 20 , so i would want a better understanding and specifically about some of the changes that theyve made in china. China was one of the big positive surprises, down 4 year over year, versus down 20 in the marquardtech quarter in liptons interview, tim cook talked about some of the changes they made in the policy. I want to talk about sustainability of the changes. There could be a risk nonetheless in terms of the Regulatory Environment and, lastly, how theyre thinking about 5g. Thanks. We will check back with you later on where is apple heading from here we will turn to the charts and chris is here to break it down why dont you head to the plasma. Yes when we look at the response after the hour, it speaks to how low the bar was heading into it. What we want to focus on here is one number, thats 215 stock trades 218 right now so were through the key 215 level. When we zoom out and look where the stock has been over the last couple of years, that level, 215, has been the midpoint it has been the line in the sand no price progress made on apple for the better part of the last 12 months. What we had was a 40 decline here, we had a 20 down market there. So how does it respond to here well, if we look at the chart with some lines, were now pushing up and out of this resistance thats been in place for the better part of the last 12 months, getting up through 215 we think you can certainly make a run at the old highs of 233 and maybe challenge the 250, 260 range. What i think is compelling about the name from a sentiment standpoint, these are the buy ratings on apple right now you have the fewest number of analyst buy ratings really in about ten years. So the bar was low going into this i think the response of the stock certainly reflects that as well so what else can we own that captures this team how about things that sell into apple, anna log, adi, great example. This was a stock that peaked first. Frankly it bottomed first late in the Fourth Quarter last year. It is making absolute highs, relative highs semis have been very strong. We think it is the leader within that group i would highlight micron as well sells into apple a stock that peaked early in 2018 before apple did. It bottomed first. It has just started to break out above that really important level, about to make new highs here so when we look at the message from apple, i think that it says or i think it speaks to own the ecosystem as well, micron, adi, all speak to that. Chris, why dont you come back over to the desk here and lets stray lets trade this ecosystem it has been tricky to own the suppliers or view the suppliers as any sort of indicator for apple. Where would you stand on this . This thing in apple, if you want to own apple i would just want to own apple. Make it simple. Adi reports i think on august 21st. I think piper raised their price target to 135 or so. Not a cheap stock. 22 times forward, 30 times trailing however, what chris just said, i mean it is a stock given what apple just said that might continue to rally in their earnings once again, if you are looking for a name that might have some tail winds into their earnings release, adi might be the one. Lets get bash r back to josh lipton with more news on apple josh. Reporter some news on the apple card cook saying it is being beta tested by employees right now and the rollout will happen in august no hard date here on the call cook is offering, but he says it will happen in august. Of course it is his highprofile Credit Card Partnership between apple and goldman and another service for the iphone maker, melissa. Thanks. Josh lipton with an update it looks like a rollout sometime in august. Will it help the Services Business it is incremental it wont be a game changer, but when you look at what the offerings are, these have not been part of the service numbers, and theyre Getting Better and better. On wearables, it says over 75 of the people buying an apple watch were buying for the first time wearables, again, is a multiple i think is very important for services because it gets you into health care and into all of the components that tim cook, i think really are the things he is driving at apple and i think it is exciting. I want to get back to the point gene was making that i thought it was interesting about the valuation of apple, and comparing it to another company and he said cocacola. Would you make that comparison i can understand what gene said i wouldnt make it but gene is the analyst, im not he said somewhere between 20 and 25 i can play the math game as well if you give them a 22 multiple off next years earnings, which i think is 12. 5 or so, you are talking about a stock going from 270 to 275. I think it is probably in terms i dont want to speak for gene, but it is probably right within nhis crosshairs for the name. It is hard to think about in history thats been this important peak with a multiple of 17 times. Go back in the annals of history, you cant find reasonable valuation in the market tops. Did owny ever when they were hardware king . If you look at the valuation of japan in 89, they were extreme. It is hard for us to fathom it is a market cycle top or apple top with a valuation at 17 times. Everything related to china is acting better. I think the message from apple confirms that as well. Well, first of all, the install base continues to grow as you get into it was an announcement from the quarter. It is very bullish if you want the Consumer Product story and talk about it as a ctp company, if you think about where youre guiding the hardware it gets back to so nokia, you can make an argument, used to be my girl, it basically traded about 14 times multiple in its heyday so when people are doing their blended multiple on apple hardware, theyre not going at a 14 theyre going at an 11 and theyre going at, i think, a much more conservative. You wanted eight. Well, the most important thing that has not been talked about is the financials, the Balance Sheet. The ability of this company to grow earnings independent of some of these dynamics is going to get you at almost a 15 . All right we will check back on apple as tim cook gets under way on the earnings call. Still up 4 here theres other news outside of apple. Amd and fireeye down big on results. Plus, we have results. We have headquarters listening in with the biotech. We are live from the nasdaq in new york city, fast money. Much more right after this welcome back to fast money we have an earnings alert on a pair of biotech games, am again and gilead moving in the after hours. Lets get to meg with the details. A lot going on. Well start with gilead, that stock moving a little to the down side in the after hours, down just a fraction there getting some wall street reaction right now as the call is going on. Michael jeffreys call it the big bang theory, rereferring to a drug that Beat Estimates in the quarter. Seeing guidance. Brian skorney says it looks really vanilla Corey Kasimov says what everybody is thinking, that the new ceo, his commentary is what folks will be focused on lets talk about am genergen is quite a bit. It is something theyre talking about in their slides and on the call wall street reaction Brian Skorney pointing out in the quarter neulast declined faster than expected Corey Kasimov notes enbrel was the biggest beat umer raffat pointing out by far the biggest discloeshier earnings is on the kras inhibitor. It is a pipeline drug probably most important in their line, it is for cancer. They disclosed more on this than we have seen in other kinds of cancer, so thats why the stock is probably up. Meg tirrell, thank you. Guys neulasta, the street was at 900 million. His to his torically, it was good they didnt raise the lower end of guidance, not the upper end maybe it is disappointing. Now people are saying wait a second, they might have a cancer blockbuster drug potentially, and you look at keytruda when you want to see what can happen with a stock like merck. Then look at the valuation at 11 times earnings and say it is too cheap. Too cheap is what we say about the mega cap biotechs and we have been saying it for a long time. I was saying it for a long time about gilead which was a position i held for a while and vacated. Hiv was pretty good. Hvc was very good but we are still listening to dan oday or some ceo or whoever it has been in the past talking about what theyre going to do on m a it is a company that is a deal away it has 30 billion in cash and it is a case where you still want to know what is going to happen. I think it is too hard here this is a group thats not a leader, making new relative lows versus s p amgen every time it rallies sales at a lower high. Until you get back above the 180, 185 range play prudently. If you are trading long, use the stock at 173 that has to be the line in the sand in a strong market is this what we want to do, picking losers . I think this is too strong. You have democratic debates tonight and guaranteed the cost of drugs is going to come up. In the crosshairs for sure. I dont know if for another year we see that and even if ultimately nothing happens, still, for a year you could be facing big headwinds. Coming up, shares of apple touching after hour highs as tim cook said in the after hours Conference Call. We are counting down to the rates decision, with the fed triple play. Im melissa lee, you are watching fast money on cnbc. Must more fast right after this weve got a news alert eamon javers in washington with the information. South korea reporting that the North Koreans launched several identified objects, theyre not calling the objects missiles just y