'Fast Money' Recap: Apple and Microsoft Earnings in the Spotlight

NEW YORK (TheStreet) -- There S&P 500 climbed 0.50% as Microsoft (MSFT), Apple (AAPL) and other companies reported earnings. On CNBC's "Fast Money" TV show, the panel started with Apple. 

Dan Nathan, co-founder and editor of riskreversal.com, said investors who are currently long the stock should be happy with this earnings report. He added that gross margins were stronger than expected.

Guy Adami, managing director of stockmonster.com, noted the average selling price for most products were down, but overall it was a good quarter. He thinks the stock will move higher. 

Brian Kelly, founder of Brian Kelly Capital, said the "quarter was good enough" for Apple. However, he pointed out that iPad sales are weakening, which could be trouble.

Steve Grasso, director of institutional sales at Stuart Frankel, said a larger iPhone could hurt margins more than investors think. The stock is rangebound between $85 and $100 for now.

Gene Munster, managing director at Piper Jaffray, has a buy rating on Apple with a $105 price target. He was pleased by Apple's gross margins and said the new iPhone should be available in the last week of September. He thinks Apple is "just scratching the surface" in China. 

Amit Daryanani, managing director at RBC Capital Markets, has an outperform rating shares of Apple with a $100 price target. He also said the iPhone is likely to be available near the end of September. He has not factored in new products into his price target, but suggested that something such as the iWatch could boost margins, and therefore, earnings per share. 

Microsoft beat on revenue estimates but missed earnings expectations. 

Dan Ives, managing director at FBR Capital Markets, has a buy rating on Microsoft with a $49 price target. He said this earnings report definitely represents a "step in the right direction." He added that PC demand is benefiting Microsoft, as is the cloud. He suggested that it wouldn't be surprising to see Microsoft trade above $50 as investors start to value the stock more. 

Nathan disagreed with Ives' price estimate, saying the stock, which is up 19% year to date, is moving too far, too fast. Grasso argued that Microsoft could get a higher valuation as it expands into the cloud. Kelly sold his long position in Microsoft, saying he would buy the stock back in the low-$40s.

Adami said investors long Intuitive Surgical (ISRG) following its recent earnings report should take profits. 

Kelly suggested that now is a good time to start considering a long position in automotive stocks. Adami is a buyer of BorgWarner (BWA). 

Adami said shares of VMware (VMW) appear to be breaking out to the upside and he is a buyer of VMW over EMC Corp. (EMC).

Nathan called Broadcom (BRCM) a "good company" but said he wouldn't be a buyer of the stock following the big move to the upside and the "huge resistance level" at $40. 

Grasso said he took profits in Qualcomm (QCOM) and has yet to repurchase the stock. 

Kelly is not a buyer of Juniper Networks (JNPR) near current levels but would be more interested in the stock on the long side near $22. Adami said Cisco Systems (CSCO) seems like the better buy over Juniper. 

Adami argued biotechnology stocks are not overvalued at current levels, especially names like Celgene (CELG) and Gilead Sciences (GILD).

Harley-Davidson (HOG) fell 5% and was the first stock on the show's "Pops & Drops" segment. Nathan said he is a buyer near $60. 

KB Home (KBH) climbed 2%. Grasso said the stock should continue moving higher. 

Aetna (AET) popped 1%. Adami said his favorite in the insurance industry is Humana (HUM). 

CIT Group (CIT) jumped 11%. Kelly said investors who are long should consider taking some profits in the stock.

Adami reasoned that investors could likely buy shares of iRobot (IRBT) on Wednesday. 

Nathan said it is too hard to "call a top" in Chipotle Mexican Grill (CMG) and sell the stock short. He also complimented Domino's Pizza (DPZ) on how management has executed.

Adami said McDonald's (MCD) continues to struggle and may be headed toward $90. Grasso said Domino's Pizza could have a little more upside and he is buying the dip in McDonald's. 

Kelly reasoned that McDonald's could be in trouble as competition continues to heat up. 

Adami said shares of Herbalife (HLF) seem poised to fall on Wednesday following the 25% move higher on Tuesday. 

For their final trades, Nathan said to take profits in Microsoft and buy the stock back near $42. Grasso is a buyer of KB Home, Kelly is a seller of gold and Adami is a buyer of Jack In The Box (JACK).

-- Written by Bret Kenwell in Petoskey, Mich.

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Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter.

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