Correction for stocks. Im in for melissa lee. Tonight we start with apple. The stock surging on a big top and bottom line about it. We just sat down with the ceo tim cook moments ago. Lets get straight to josh with the headlines. Josh . Sarah, i did sit down with ceo tim cook to go over the quarter. Let me give you the highlights. He said he feels fantastic about how the iphone did in q3. 40. 4 million un iits. Cooks point to me was that iphone demand was actually even better than what those sales might indicate because he took down that smart phone inventory by about four Million Units in the quarter. He also says he feels bullish about that iphone franchise looking ahead. He pointed at the q3 that the switchers from an zroidroids hi record. Iphone se he pointed out that, is the latest iphone, the four inch device, is attracting a whole new group of users to the ios system. And as for other products, ipad about ten million. That is a product still under pressure. Cook telling me this is the first time in ten quarters it has shown Revenue Growth. Services revenue popping 19 to 6 billion. That is increased the area of focus for investors. Cook telling me he expects services revenue, that seg ment, to be the side of a fortune 100 company by next year. He said growth is up nearly 40 . Apple music, i cloud all growing. Finally, i want to touch on greater china. Did you see that down about 30 . Cook saying that Mainland China this fiscal year is down about 2 . The point being they are tough comps and economic challenges. He still feels really about about china. Theyre not backing off their Investment One about it. Recently opening the 42nd store in china. Thank you very much, josh. Lets trade apple on the desk. Karen, youre the only one that actually owns it. Well, i affirm. Yes. Long. You know, theres a lot to like in. This a lot of the numbers look pretty good. China thing was a little of a fly in the ointment. The other thing is the apple call is often very different than what we see in the headlines. I want to wait bring get excited about there to hear what they have to say. So far, it looks pretty good. Even though the stock came in i think with lower expectations. So this is kind of a beat. Im surprised its not up a little more. Are you impressed, guy . You should be impressed. I it this iphone numbers are g even the mac numbers were actually better than the disastrous numbers i thought people were looking for. Ill say this great quarter, the whole thing. If you look at it from a technical point of view, look at a chart since last may when it topped out at 132, you have a series of lower lows and lower highs since then. If the stock were to be able to close above 105, then maybe were finally breaking out to the upside for the first time in about lets call it 18 months or. So but in my opinion, in order for this to really be off to the races, its got to get above 105 on the upside. Its all about the expectation, too. Right . You can take the negative side and say revenues were down. And maybe the margins are not as good. Tim cook is still saying force. And forecasting another down quarter. And talking about china and how the sales were down and putting kind of a lipstick on it saying well it was Constant Currency and all the comps. Those are the negative. That being said, because the expectations were so low, because coming into this quarter people didnt expect much, its probably enough for the next 90 days to apple for april toll sustain the levels. The way i would trade it, i wouldnt buy it up 5 . If you got pullback day, i would look at it to buy for trade going into next quarter because its probably enough to keep it up. And now with the highs up 6 , does it entice you any . You are looking at margins . Listen, i think like karen said, expectations were very low heading into. This the stock had very, very poor sentment. Its been down 27 since the highs in 2015. There is really nothing in there other than stabilization. I dont think you can look to the margin guidance that they suggested. Listen, lets see what they say on the call about the se contribution to the iphone next shift and what that means for the margins. I dont think youd like to see that having a negative impact on that expensive getting more units. The only thing i say this is probably a good piece of news. Im not a huge buyer of the whole services aspect of it. I think it will be a good thing. Tim cook did say to lipton that he expects it to be this big thing. It was flat. That was really g you know why . Last quarter they did 50 billion in total sales. It was 12 of sales. This year this quarter they did the same amount of Service Revenue and a greater percentage and much smaller number of the whole. The only business line that they have growing in this quarter double digits. Let me ask you. Do you ever look at this valuation and say, you know what . Its actually attractive. You can pick out the negative things. This quarter, there was a lot to like about it. I think youd like to see the asps grind down and up. We know that androids are average selling prices were 215 last quarter for apple. 645 and 605. Lets get them down to a point. Lets get them down to a point where you can see that rollout in emerging markets with this new price phone here and so, you know, that would get me excited about it. We know that there is big growth opportunities. Like china over the last couple years, but like you said, china is massively decelerated here. It is flattened out a little bit. It is still growing. Not the hyper growth they had. The cash pile growses to 231 billion. They fell quarter over quarter. That may be the first time that napd a very long time. Still, we have a 231 billion cash cushion. Why did soft bank go out and buy arm holdings which makes a lot of sense for april toll buy . Apple doesnt have a history of making the acquisitions. The acquisitions they made over the last year or, so really, i havent seen much that have panned out. Beats was supposed to be the greatest thing to music since the head phones started. And it hasnt panned out. Apple still the iphone company. Now the real question that investors have was last quarter was that the trough and were on our way up or is this quarter just a blip . My feeling is that this is probably just a blip base ond some of the broader Macro Economic figures that im looking at. So i think there is enough here that if youre an apple bull, youre going to get a chance to take profits at higher prices. Not enough to say were going to new highs. On the cash thing that, is net cash number. That is a gross cash number. Remember, they did issue debts, some of the cheapest debt around. And so that catch is off shore. You have to discount that as well. What can you say i should know that, shouldnt i where have you been . Ive been sitting on this desk for a long time. Gets to the idea about streaming about services and streaming revenue and whether you need to val unite company as a services company. Dan is not buying it. Fwhut is what tim cook wants from investors. Thats what he needs. Otherwise, when listen, every company thats made products in the last 100 years at a certain point backs ubiquitous. Sony comes to mind. If they can have that service end, then theyre not as they lose at built to become commoditized as quickly. Lets bring in apples biggest bear, the man with the call. You downgraded the stock from a sell to hold yesterday. Heres what you said on halftime report. You know, if we look at the Management Team that has not diversified revenues away n five years, the only product category they opened superintendent watch. That hasnt had Material Impact on the revenue. They squandered the domestic cash and buy back stock and we think that if we look at the next 100 billion in value, thats to the down side. All right. So collin, what did you miss about the quarter . And what would you take it back now . In fact, if we didnt downgrade before the earnings we would be downgrading it right now. The thesis wasnt about the june quarter. We need some time for this to play out. Give us until march. The whole concept here is that the seven upgrade cycle is going to be slower than what you saw for the 6s upgrade. Youre looking at a Company Whose revenues declined 15 on a year over year basis. Whose iphone revenues declined 36 . And you talk about greater china, things like that, you know, they do some of the tail inventory. They had some success with the launch of the iphone se. You saw asps drop below 600. Youre seeing the lowest operating marge than weve seen in the last handful of quarters. So this is still a company that is dependent on hardware sales that hasnt diversified out of it. Slightly better than expected. But nothings changed in our thesis. What exactly did we learn about the iphone 7 which is set to be released in september . What can you gauge in terms of what kind of demand theyre expecting based on the guidance that they gave . Thats an interesting question. Right . We dont really know is the mix of demand for the seven and the guidance versus the se. But we do theyre guiding Gross Margins to be at the lower end of expectation and below consensus. Theyre on the call now discussing about they see good strong switching demand from android platforms. And thats, again, part of the reason the asps are declining. Collin, you said if you didnt downgrade yesterday, you would downgrade today off this quarter. There will be analyst thats will upgrade the stock on the back of. This im pretty sure. What do you think they see . Im not asking you to play in this . There is a relief raly. Most everyone has a buy on it. So there are very few people throughout that are able to upgrade this right . Or raise the price target. Can you raise the price targets or for the most part, i point to September Quarter revenue guidance is healthy. And its decent. Right . And again this is partly because of the se and partly because of the beginning of the launch. But we want to see the sustainability of the upgrade cycle and quite frankly, the real driver in in this quarter was the ipad. The i spad what helped drive the upside. Karen . So a couple things. Todd, im glad you actually came out the day before they announced. This time it didnt work out. Good for you for doing it. I think you had an 85 price target. How do you get there . And does anything that came out today make you change that target . Sure. If you look and think about apple, you know, what is the level of growth going to be over next fiscal year . Were modelling revenue to be down by about 1 . We also take the overseas cash and we dont see a tax holiday coming any time soon. You want to apply a discount rate on that tax . We dont see it being deployed either. Pick the number, 35 , 40 . We used 40 . And apply single digit multiple to what is left. Eight, nine, ten times. Thats the raise that you want to be paying for the company. Thats the range in that range that market is willing to pay. Because again, the level of earnings predictability given the dependence on the iphone, right, is unpredictable. And if you look at every other hardware maker of smart phones, theyve all racked up on the shores at some point. We think that there will be demand for the iphone 10. But for the current iphone cycle over the next four quarters, we may have to see numbers coming down. Didnt happen yet. You know, there is still always the december quarter. The stock rises to session highs at 7 . Collin sticking to his guns. Well see new a bit. Correct. Jump on that call. Sticking with apple, check out how the suppliers did today. The whole chip space rallying on news that Analog Devices agreed to buy Linear Technology for 14. 8 billion. Did the chip stocks signal this beat i wonder . I dont know if the chip well, in retrospect can you say. That ill tell who you singled this, nathan and carter about two weeks ago. We talked about qualcomm. Its not just qualcomm. But that is one of the first. We talked about nvidia. But qualcomm to me after the move its seeing is really interesting. In retrospect we should have seen this coming. We have seen quarters up where you see the suppliers do well and then april will have a down quarter. It is easy to say in retrospect. I still like qualcomm. But the sector has been right for consolidation. Thats right. Semiconductor consolidation is not about pcs or smart phones. Its about the internet of things. Its about industrial. We saw texas instrument traded at all time high today. Hit tloil do with the categories i mentioned. The deal today, the analog devic devices, its not about telecommunications or pcs or anything like. That and a lot of the altera deal of intel 17 billion late last year, same thing. So a lot of the big semiconductors are looking to diversify away from this. Are there any left in terms of names that could get bought out . Sure. I mean, theres people have been talking about an ambrella or silicon labs. One thing ill say is qualcomm is likely to be an acquirer of texas instruments. Theyve been sending 100 of the Free Cash Flow to buy back stock and pay dividends. So the question then is this game has been going on for a bit. Good for everybody who has been on it f you look at smh, the semiconductor etf, that thing is a hockey stick straight up. So the question is what else is left in this market . People have picked over this space looking for that consolidation. You know, i would be skeptical of buying an all time highs. All right. Much more on apple as this Conference Call gets under way. Its no the just april that will were all over tonight. We head to break, heres a look at twitter going in the opposite direction down more than 10 . Tanking on earnings. That call now well under way. Well hear from the Ceo Jack Dorsey in a bit. Plus, panera rallying on earnings. How much of the fast casual giant benefit from chipotles troubles . And later, as this man rises in the polls, one wall street heavy hitter says trump could be the very thing that sends stocks tumbling. Hell explain when a very busy earnings central fast money returns in just a moment. Announcer when they test you, stand firm and move only when you hear the seatbelt click that says theyre buckled in for the drive. Never give up till they buckle up. Welcome back to fast money. Under armour tanking to the tune of 5 . Earnings falling but still meeting expectations. Sales growth fell below 20 for the first time in seven years. One bright spot was certainly sneaker sales. Up 58 due to an endorsement by, of course, steph curry international. Also pretty strong, karen. Why the sharp move lower . Its expensive. There is nothing more than that. It has big expectations built in. The pe multiple is expensive. They need to grow at a decent clip to be able to grow into that. It wasnt terrible. I also though, i feel like every quarter they talk about sports authority. Every quarter. The bankruptcy. Yes. But i do like going into kohls. That is interesting. I dont know how i really feel about. That i dont know. Koibt fine. Then they also talk about taking the fao Schwartz Space which we were talking about. That is a very big, expensive piece of real estate. I think 20 million a year. And right next to the apple store. And two blocks away from the nike store. I guess they feel like they need that kind of big presence in a big tourist city like new york. Okay, its expensive. I would put it in the marketing category. And margins did narrow. They came in under expectations. Its good. But to karens point. What they need is to grow at extraordinary pace. Theyve done it. You never want to bet against kevin plafrpg. He is kind of like howard shultz. One of the top ceos of all time. I would not bet against him. I would just wait for the stock to come in a bit before i bought it. Maybe come down in valuation a bit. Were taking property. Sounds like you have a little man crush there. I have to tell you, you know what . I think the one take away that i see if a headline is the mixed shift towards footwear. Thats where the marge rinz lower. Thats where theyre hoping to gain a lot of traction. Just one other thing this stock gapped up in late april after they reported that q1. And after that gap, it went down 28 over next month and a half or so. Because of, i think a lot of the issues that youre talk bchlgt it since recovered. But this reversal is very similar to april. So its down double digits over the past 12 months. It underperformed nike. You would play you would rather . Sure. I mean, thats still a thing here. I would rather well, lets this is a tough one. I would rather nike. I think the valuation for under armour, youre talking about a stock that is 55 times forward earnings with eps growth probably closer to 25 , 30 . So when Revenue Growth continues to dwinding, you have to wond whert valuation catch up . Nike is a more reasonable valuation. Yeah. And lulu lemon is having a much better year, up 40 so far this year. Nick like lulu . No. Not after the run its had. Of all the name, i think nike is the name to go w but all of them to me have still had quite a run. So i would be more in the profit taking mode in this particular sector. All right. As we head to break, heres a look at both apple and twitter. Big after hours movers. Apriling surging, twitter tanking. Both of the Conference Calls are now under way. Well bring you the highlights. Y you recommend synthetic over cedar . Super food . Is that a real thing . Its a great school, but is it the right the one for her . Is this really any better than the one you got last year . If we consolidate suppliers whats the savings there . So should we go with the 467 horsepower . Or is a 423 enough . Good question. You ask a lot of good questions. I think we should move you into our new fund. Ok. Sure. But are you asking enough about how your wealth is managed . Wealth management, at charles schwab. Weve got a news alert here on the third points. Kate kelly at 30 rock with more. What do you have . Sayer yashgs just hot off the presses, typically colorful letter from dans third points hedge fund. He compares the current investing environment to game of thrones particularly the battle of the bastards scene of this last season. His quote, surging enemies forming a seemingly impossible perimeter, a crush of fellow soldiers on the field, et cetera. Use a sword and shield to fight your way out of a seemingly impossible situation is a good analogy. To what hes going through in the markets right now with the brexit vote being a very good example. Just a couple things i want to point out though, essentially third point as eliminated the position in amgen, not seeing a heck of a lot movement in that stock after hours. But well see what happens tomorro