Square (SQ) - Get Square, Inc. Class A Report agreed to a $29 billion deal for Afterpay in an all-stock acquisition and Jim Cramer called the acquisition "brilliant," noting that analysts love the deal as well.
"What's the best way to make money in the stock market? Find out what millennials want and give it to them," Cramer told his Mad Money viewers Monday. "Services like 'buy now, pay later' are red-hot with millennials, and that's why Square's acquisition of an Australian payments rival was so well received.
Square said that "buy now, pay later" represents a huge opportunity for the company, as deferred payments still only account for 2% of total online sales. While shares initially dipped on the news, they closed up a stunning 10.1% by the close.
Over on Real Money, Cramer says the truth is, "you can't get at these people the way traditional marketers work, because many of the customers of these companies simply hate anything traditional in the financial space." Read his Real Money column for more investment insights and trading ideas.
When Twitter (TWTR) - Get Twitter, Inc. Report and Snap (SNAP) - Get Snap, Inc. Class A Report reported earnings this past week, shares soared. But when Facebook (FB) - Get Facebook, Inc. Class A Report and Pinterest (PINS) - Get Pinterest, Inc. Class A Report released their earnings, things got confusing, wrote TheStreet's Scott Rutt. Now that all of the social media results are in, Cramer says it's time to take a second look at the group.
Of the 269 companies reporting June-quarter earnings, 88.5% have topped Wall Street forecasts, and while some forward guidance -- particularly from the biggest tech companies such as Apple (AAPL) - Get Apple Inc. (AAPL) Report, Amazon (AMZN) - Get Amazon.com, Inc. Report and Facebook -- was modestly disappointing, third-quarter earnings are still forecast to rise by 29.7% to a share-weighted $414 billion.
Here is a breakdown list of the technology and FAANG stocks to watch right now based on their performance over the past week:
Facebook easily beat earnings and revenue expectations seeing 100% earnings growth but gave investors cautious guidance that noted decelerating growth and headwinds ahead. The social media company has been a huge winner so far this year, wrote TheStreet's Bret Kenwell. While the quarter was solid, the guidance was not, which does leave us with some risk in the stock, according to Kenwell. However, the trend is still to the upside, so until that changes -- perhaps it becomes a downtrend or maybe it results in some sideways chop -- bulls will be hesitant to alter their strategy.
Cramer said Facebook is a steal at just 22 times earnings.
After years of stumbling, Snap has found its groove, delivering 116% sales growth and a 10-cents-a-share earnings beat. Cramer said Snap told an amazing story and has more room to run.
Apple Inc. moved higher this past week after the world's most valuable tech company filed plans to raise billions in the bond market that could be used to boost shareholder returns. In papers filed with the Securities and Exchange Commission, Apple said it may sell four different notes, ranging in maturities from seven to 40 years, with proceeds directed to "general corporate purposes, including repurchases of our common stock and payment of dividends under our program to return capital to shareholders, funding for working capital, capital expenditures, acquisitions and repayment of debt."
Cramer appears to be even more favorable to an investment in Apple shares. The reason: the stock could weather fears over the resurgence of COVID-19 cases better than others, wrote TheStreet Apple Maven's Daniel Martin.
Uber Technologies, Inc. (UBER) - Get Uber Technologies, Inc. Report posted mixed second-quarter financial results. The ride-sharing giant topped Wall Street forecasts with earnings of 58 cents a share on revenue of $3.9 billion. However, the company’s adjusted EBITDA came in at a negative $509 million, wider than expected. The company had been expected to report a loss of 52 cents a share, on sales of $3.8 billion, based on a FactSet survey of 29 analysts. In the same period a year ago the company posted a loss of $1.02 a share on sales of $2.2 billion.
Cramer said that Uber Technologies is "a tremendous, tremendous way to measure the economy." Cramer said that during the company conference call, CEO Dara Khosrowshahi discussed how driver shortages were linked to employment benefits.
Zoom Video Communications (ZM) - Get Zoom Video Communications (ZM) Report reached a preliminary settlement on a user privacy lawsuit this past week, agreeing to pay $85 million and improve its security and privacy practices. The proposed settlement would resolve a class-action lawsuit filed in April 2020 in the U.S. District Court for the Northern District of California alleging that Zoom violated user privacy rights by sharing personal data with Facebook, LinkedIn and Alphabet-owned Google (GOOGL) - Get Alphabet Inc. Class A Report, as well as allowing the practice of Zoombombing during Zoom meetings. The settlement requires approval from U.S. District Court Judge Lucy Koh, according to a Reuters report.
Shares of Roku (ROKU) - Get Roku, Inc. Class A Report dropped after the media-streaming company topped second-quarter earnings and revenue estimates but fell short on active accounts and streaming hours. Roku reported 55.1 million active accounts, a 28% year-over-year increase. But Wall Street's analysts were looking for 55.7 million active users.
Cramer recently said that he remains a fan of Roku.
Pinterest shares plunged this past week after the image-sharing social media group reported disappointing gains in active users that overshadowed an otherwise solid second-quarter earnings report.
Cramer said Pinterest was the toughest quarter to evaluate. The company's active user count shrank, and it is also seeing engagement headwinds post-pandemic. Cramer put Pinterest in the penalty box and said it shouldn't be bought until further notice.
Microsoft (MSFT) - Get Microsoft Corporation (MSFT) Report said that starting next month, it would require employees to show proof they are vaccinated against COVID-19 before they can enter any company facility in the U.S. The move comes as the software titan joins a growing list of companies bolstering their policies in the wake of a resurgence of coronavirus cases. Microsoft also said its U.S. facilities will fully reopen no earlier than Oct. 4. The previous plan was to reopen on Sept. 7.
Amazon.com may face a second unionization vote at an Alabama facility, the Retail, Wholesale and Department Store Union said in a statement. A National Labor Relations Board hearing officer “determined that Amazon violated labor law,” according to the statement. The officer has recommended that the regional director set aside the results of the April vote and direct a second election be held, according to the statement. Amazon vowed to appeal the recommendation. The company won the bitterly contested election in April.
Netflix missed on earnings expectations despite reporting global net subscriptions ahead of estimates. The streaming giant reported earnings of $2.97 a share on revenue of $7.34 billion. Analysts were expecting the company to report earnings of $3.18 a share on revenue of $7.32 billion.
“If you focus on Netflix, you’re missing the bigger picture of corporate America doing very well,” said Cramer, who maintained he's been "a huge backer of Netflix for ages."
Cramer told Action Alerts PLUS senior analyst Jeff Marks that the company's earnings call didn't make Netflix seem like the growth stock it has been in the past.
Alphabet's Google (GOOGL) - Get Alphabet Inc. Class A Report announced two new smart phones that will debut this fall and will include Google’s own semiconductors. In the past, Google used chips from Qualcomm (QCOM) - Get QUALCOMM Incorporated Report. The Pixel6 and the Pixel6 Pro will contain “Google Tensor, the brand new chip designed by Google, custom-made for Pixel,” the company tweeted.
Google worked on the Tensor chip for four years, and Alphabet Chief Executive Sundar Pichai labeled it the “biggest innovation in Pixel we’ve made to date.”
Shares of Square (SQ) - Get Square, Inc. Class A Report were trading lower in Monday’s premarket session, but have since rebounded. The move came after the company's largest acquisition, as Square agreed to a $29 billion deal for Afterpay in an all-stock acquisition. "Investors using longer-term targets may consider the 138.2% and 161.8% extensions should Square stock push above $300," according to TheStreet's Bret Kenwell.
Microsoft, Facebook, Apple, Amazon and Alphabet are holdings in Jim Cramer’s Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells these stocks? Learn more now.