Apple. Josh lipton has the latest reporter apple says the stock split is to make the stock more accessible to a broad base of investors iphone revenue is blowing past expectations 26. 4 billion. I did have the chance to catch up with apples ceo tim cook we talked about those iphone demand trends and the mix in the quarter. Cook telling me iphone 11 is the most popular iphone and we had a great launch, he says, on iphone se during the quarter. It was also very strong, an uptick in switchers, meaning android switchers, that we were happy to see and the iphone se is clearly helping with that i asked cook about those broader work from home trends, how is that benefiting apples products and services during the quarter. Cook says it definitely is, it definitely has boosted, cook saying, mac and ipad, we see those picking up for productivity weve son several school buys of ipads. We have the strongest lineup in both mac and ipads than weve ever had, a combination of those coming together at the same time that are production the results. We did ask cook too about china, what are Business Trends like in china during the quarter cook telling us they did grow 2 in real dollars but on a Constant Currency basis, they actually grew 6 so we definitely saw china sort of come back into a big increase from where it was in the quarter before where the shutdowns took place. And remember, in china, those stores have remained open. Its not like here in the u. S. We saw stores open and fairly quickly have to close. I asked cook does he think that made a difference, he told me, it has he says, i think getting the stores open again in china was key. We now have about 75 of the stores open in the world and im hoping the pandemic gets under control and that we can reopen those here in the u. S. Soon. That Conference Call is kicking off right now. Melissa . Do you think well hear about the timing of a 5g phone launch . Reporter tim cook does not tip his hand to whats coming down the pike in his portfolio, melissa, like some of his peers. So i think it will be hard to get details. Analysts will look for any kind of commentary about whether that annual iphone launch is on track or at least largely on track i think a lot of investors think, listen, if it was delayed by a month or two they wouldnt be too worried they might start getting worried if it meant those phones wouldnt be on shelves in time for the holidays even if they are, the big question is what will demand be like for those phones. They will soon find out. Josh lipton on apple, thank you. Guy adami, High Expectations going into this quarter. We have the stock here higher on the back of this incredible. The one that sticks out to me, consumer services, the revenue is now 22 of their overall revenue, thats trending in the right direction. Tim can speak to this, thats why theyre getting the multiple they probably deserve. Its interesting, the last week, i think it was the 24th, and look, i was on record saying i thought the stock would trade back down to 325, you would get another opportunity to buy it on that alltime high but on that day, the stock was trading in the mid350s. It was down precipitously over a few trading days and now were up again this is the fifth split they have done in their history my sense is, it will happen at the end of august, the stock probably meanders on either side of 400 theres nothing not to like about this quarter tim the numbers are extraordinary, not just 22 , they grew 15 , if you think about it, its a 56, 57 billion company on its own on an annualized basis the 198 billion of cash is something thats very important. I think the ability of this company to use their Balance Sheet and to create value for shareholders is something that continues to be underestimated in terms of the multiple, you put it at 25 times next 12 months on the services, iphone, about 16 times, mac at about 11 times, other products, somewhere around 12 times. You can rationalize a 22, 23 times forward multiple, which at this point, i think the street will be rush to ing to upgrade one. What makes this so extraordinary, the four big stocks that reported in the afterhours, apple was truly the one in my view that was the most off size in terms of how far it had run. From june of 2019 to this move in the after hours, youre talking about a 160 move, nothing short of extraordinary the expectations were high coming in, and these guys beat it its a very big afternoon. Upgrades on the street, brian kelly, can we upgrade a stock if a company does not give guidance for the rest of the year yeah, i think you can i mean, mepeople will. People will start anticipating whether or not that 5g phone will come out. Theyll try to anticipate, the growth in the corner was a onetime thing, people are at home, they have to buy a computer, they have to buy an ipad, and is that sustainable. I think it is, i think youre seeing a real shift here people are going to come out and say it, theres nothing really wrong with it. I think people upgrade this. The one thing i would say in general, though, this is very clear about across the board with earnings tonight, is that number one, you never bet against the American Consumer, even in the middle of a pandemic and number two, a lot of people have said, hey, the stock market is disconnected from the economy. We had a negative 32 gdp print today and these Tech Companies just crushed it. So the American Consumer is still alive and well and the american trader, were talking about robin hood and the popularity of the Retail Investor and here apple goes splitting four for one, so theoretically this is an opportune time in terms of the attention being paid to stocks by retail traders who are in there for the first time so that point, its a little bit conspicuous. Why would they do this when you can buy fractional shares with any Online Broker right now . So im a little shocked at that. But to guys point, stocks will run into a stock split thats number one. Think about where the stock came from it sold off 10 very recently. So they primed the pump going into this print. You had the Consumer Protection investigation thats coming up you had antitrust yesterday. So these things were sort of like a balloon or a beach ball being held underwater. And it seems like they all popped for me, though, i sold my large cap tech because i thought that the market was going to be selling off. Market sells off, all these names drag you down. Tomorrow well be positive i still think that selloff is coming i would be taking profits right now. I dont want to get back into large cap tech just yet. Speaking to those new to trading at home, guy, you take one stock, its like a piece of cake, you cut the cake in half and you still its the same, its the same piece of cake, its just cut into different pieces, same amount of calories, same amount of fat that youre consuming, theoretically we shouldnt have to say this im not trying to speak down to anybody at all, but its worth mentioning, the stock will be cheaper in terms of price, but its not a cheaper stock and listen, i say it because i think we have to and i understand what steve just said, and my pushback would be, just to take the other side, my sense is maybe one of the reasons they did it, split four for one, is for the exact reason steve just mentioned, maybe theyre not all enamored over the thought of fractional shares i dont know, but it would be the other side that have coin. Lets bring in gene munster of loop ventures, green, great to have you with us. What stood out to you . Lets take a step back. Apple had everything thrown in in this quarter in terms of what would happen with the iphone that powered up 2 a year, really surprised me. The overall businesses were expected around mac and ipad but that shows the strength. This company has powerful tail winds over the next few years, 5g, wearables, ai autonomy what stands out to me is the ability to do as well as they are during the pandemic, and this tailwind coming up. I think these results really stand above the other Tech Companies that were reporting tonight. Is there anything in this quarter, gene, that would raise the ire of lawmakers who are looking to rein in apple in any way . Well, the app store is a central focus. Yesterday 20 of the questions were directed towards apple. They did well relative to the other players. But those questions were almost entirely directed at the app store and there were questions how apple navigates that if you look at the other companies on capitol hill yesterday, apple is by far in the best position. The focus of these regulators is not apple right now, it is clearly facebook and google. And i think that that piece, this what i believe is the reality of them having a lower potential impact from regulation in the years ahead, because it will take years, i think that is yet another reason to own shares of apple melissa, as i put all of this together and think about what they did specifically about the iphone business, and think about what is coming in the years ahead, the next two or three years this cycle and 5g, wearables, like we talked about, i find it progressively more difficult to defend a multiple below what these other big Tech Companies are trading at and i ultimately believe that apple should not be penalized for his hardware business. I think this quarter is a great testimony to that. And putting it together, i think the stock should be comfort bring above comfortably above 500 Julia Boorstin melissa, facebook far surpassing expectations in terms of both revenue and earnings and growing daily and monthly users faster than the company anticipated. The company ending the quarter with 2. 47 billion people using one of facebooks apps daily, thats up 15 from the year ago quarter. Guidance is particularly important, as investors want to know if the ad boycott will affect facebooks bottom line. Facebook is saying revenue in the first three weeks of july grew 10 from the year earlier period thats in line with the Second Quarter growth rate. Facebook saying they expect that ad Revenue Growth to continue through the Third Quarter. Now, that 10 Revenue Growth exceeds expectations facebook that outlook reflects economic uncertainty, the expectation that the recent surge in engagement will normalize, and the impact of the boycott, also noting headwinds from regulation that minimizes facebooks ability to target and measure ads. Melissa, while facebooks guidance might be high without the boycott, it does show the impact of the boycott is not as great as analysts feared in the release, Mark Zuckerberg pointed to facebooks relationship with small businesses, indicating how much more important facebooks small advertisers are than the big ones that are boycotting facebook Julia Boorstin with the latest on facebook, thank you. Results show us users did not go away and advertisers, the chunk of their advertisers, the small to medium sized businesses, didnt go away either. All the things we were pointing to, grasso, in terms of why facebook may emerge unscathed from all this attention, is coming to fruition yeah, i never thought the advertisers would leave. You have only a handful of choices. They have to stay. So they do what is right publicrelationswise. But this stock is back to where it was two weeks ago so when you look at the bounce that weve seen, once again, it was the type of thing where large cap tech sold off, but for me, ultimately, how can they make anyone happy . This country seems like its as polarized as its ever been. So whatever they do, theyre going to make 50 of the people happy and 50 of the people mad. I think ultimately they fall short. But i think theyve done an incredible job at threading the needle and obviously the stock is reflecting that tim look, jobless claims, continuing claims this morning were not good. Everybody knows those gdp numbers which are kind of cartoonish smbs are not in any way out of the woods here the spending weve seen out of the consumer is the sugar high from dessert i will say i still think facebook has a lot of pressure on them from advertisers smbs, who are beleagued at this point, are the place to focus. But i dont think advertisers are just doing this for lip service and for showtime i think this is going to continue to be a headwind for the stock. Ive been less than bullish on facebook i dont think thats been an awful call i think the stock continues to have the cap on its multiple i think some of the issues around Corporate Governance are things that are still going to be difficult for this company. The expectations and the noise around the company certainly would have made this a bit of a relief dau and mau numbers growing kind of mid or low to mid single teens for a company this size. But the real test is yet to come for facebook, lets be clear we have not seen the test yet. B. K. . Actually, yeah, i would take the other side on that, on the small to medium businesses they dont break out the numbers for instagram. But i can just tell you from anecdotally talking to folks that run smaller businesses, theyve had to pivot to digital, to online. And theyve been running ads on instagram. And i can tell you on my instagram feed, i see a lot more ads than i have in the last couple of years. And those are working. And so youre seeing that while, yes, you have this big pr issue with Major Companies pulling away, i think its a necessity for the small and medium businesses out there to be advertising now and trying to drum up some business. So theres nothing wrong with this quarter, again, were going to say that about every stock that reported tonight. I dont think theres anything wrong with this quarter. And facebook showed, even in july, they mentioned, listen, our ads are up 10 and thats when everybody started to boycott them or pull off the platform i still think theres growth out there. What is your instagram handle, b. K. Im quiet on instagram, i just lurk good to know. Amazons shares are jumping in the afterhours session deirdre bosa has more. Reporter the company had warned wall street covid19 expenses might lead to a loss, instead notching net income. The cfo attributed it to capacity, and a shift to a mixture including more, quote unquote, normal stuff. Amazon basically anticipated that it would take longer for consumers to start shopping for nonessentials. The Third Quarter forecast, he says they spent over 9 billion in capex, most of that towards logistics and transportation, so that will be coming online as well as additional spending in the quarter were currently in the different businesses, aws growth year over year falling below the 30 mark and slightly missing the streets expectations but aws is back tois h its historical high. Physical store sales are down 13 , a big miss in terms of expectations thats mostly made up of whole foods, the grocery unit. Elsewhere the Company Continues to fire on all cylinders well be on the call which kicks off at 5 30. Did you, deebo as we like to call her Third Party Seller services, that was interesting, seeing a big 52 pop especially after they were grilled about stifling competition from Third Party Sellers yesterday, guy adami, that was a nice dig back at congress yeah, aws softer but to deirdres point, she nailed it, you look at the operating margins overall, i think they came in at 6. 6 . Just for context, the street was looking for 1. 5 so they more than made up for it in other spaces. And just think about this for a second amazon has something they call other, one of their revenue lines is other that line is over 4 billion in revenue. Its just remarkable in terms of the scope and the size of these numbers. And one of the things we had talked about was this pretty precipitous selloff in amazon which i thought happened on the back of the walmart announcement, probably set amazon up well into this quarter. Now its interesting to see if we take up that prior alltime high that we seemingly made a month or so ago. Grasso . So when i look at the chart here, i go back to july 13 you get that price of 3344 then you go to 721, you get 3240 the reason i say that is if we cannot hold above that, you just have lower highs if aws is slowing, thats the Growth Engine in this stock. So i would think that if the market fails, i think youre going to see the 50day moving average. Thats 13 lower from here and thats the setup that im seeing in the chart. Im looking for lower on a day when everyone is extremely high on the clouds. Brian kelly yeah, so theres two things that stuck out to me in the amazon quarter number one was it took a shorter amount of time from people buying necessities to regular things i think thats permanent shift thats something where people had to go online to get stuff they wanted. They said, you know what, this is pretty easy, were going to continue to do it. The second part that have is their paid unit growth which is basically a fancy term for stuff you sold on the internet that was up 57 , thats a huge, huge number. So again, not much wrong with this aws, yeah, its weaker if you want to be picky about it, thats probably the case but not to get too far ahead of us, theres another company out there that cloud grew. Maybe its a competition thing paid unit growth accelerating 57 , the fastest pace in a decade for amazon. So this was a standout number by many accounts. Yeah, and again, so it shows where they diversified and putting some numbers behind what b. K. Said in terms of what people are buying, normal goods, its not just grocery. Global ecommerce penetration right now is midteens i realize the u. S. Is in the low 30s. Its going to be 35 in a couple of years to think about the growth thats still ahead of amazon and how far ahead they are but what theyre doing right now is investing in other growth areas. And that is groceries, thats health and pharma, thats india. Theyre putting a lot of this profit right back into the business and theyre going to be here again so when you think about the opportunity and all the things were talking about that have been fast forwarded from covid19, its hard to not see amazon still having this kind of growth and their ability to switch on the operating income, especially when they can save money through different times, is really impressive so look, apple and amazon were the ones coming into this tha