When I do my checks on what stocks confounded most of you, these three keep coming up.
So let's spend some time on them to see if their declines after reporting make any sense.
First, Amazon, the A in FANG, reported a blowout top line but a disappointing bottom line; it seems like it just isn't making enough money on those sales.
The truth? It isn't and it isn't by design. The company could have made $4 billion in profit, CEO and founder Jeff Bezos said, but it has to deal with the pandemic and says he will spend all of that and maybe even more to keep his workers safe and the company functioning in a way that makes it reliable for all. "If you are a shareholder in Amazon you may want to take a seat, because we're not thinking small," Bezos told us after the quarter.
I think these are words that can't be dismissed idly because many of you may want to be excused while the pandemic rages and Bezos and company spend as they must. We have had periods where Amazon is in investment mode and you had to just hold on until it was over. When it was over, though, Amazon was able to pull out all of the stops and just make fortunes for shareholders.
This time is different. He's not spending to make money. He spending to deal with the pandemic, which is why I think he was so circumscribed in his commentary.
The revenues tell you that the product is in relentless demand. But there was one area I was a bit disappointed in: Amazon Web Services, which only grew by 33%. I know it sounds weird to say "only" before 33% but I thought you could get mid-40s growth. Is Microsoft's (MSFT) Azure taking share? How about Alphabet's (GOOGL) Google Cloud as it's run by a terrific exec, Thomas Kurian, who is hellbent on taking share.
Whatever, what matters is that this company's just too good not to own. My advice: buy it as it comes in.
Apple's a quandary. The company reported a terrific quarter but then gave no guidance. Too uncertain. When it announced that it would give no guidance the stock got hit in after hours last night but then it was decked when the president let out word that it might be time to take action against the Chinese because of the handling of the story about the coronavirus, something that's pretty much universally accepted as suboptimal. I think that Apple's right to give no guidance and it wasn't a sign of pending weakness. It was just an awareness of the dicey time we are in. Companies don't increase dividends and buybacks if they are worried about the future. Apple did both.
When I spoke to Tim Cook he confirmed to me that the stay in place economy's actually good for Apple because Apple owns the home but not the enterprise. The coalescence of home and enterprise that comes from the Work From Home movement plays right into Apple's hands.
If I weren't so near-term negative about the market I would tell you to buy it Monday morning. The stock was rallying before the market got crushed today. The pull of the S&P was just too great. So let's wait a bit, until the market gets less overbought if you don't already own it. Nothing's changed for me, own Apple, don't trade it, remains my mantra.
Finally there is AMD and this is the easiest of the three. AMD had an amazing quarter with good demand in gaming, data center, and notebooks. I think this quarter will be even better. The company was so confident of its future that it guided to 25% growth. Knowing the CEO Lisa Su, as I do, I know that's conservative. Nevertheless, the analysts put pen to paper and decided it was a guidedown and then postulated that AMD was losing share to a renewed Intel (INTC) .
Here's my take: AMD is doing extraordinarily well. It has fabulous chips in great categories with fantastic customers. Things will only get better. That's why of the three I think you can start buying this one on Monday. I'm not calling it a bottom, I am saying that it's gotten overly punished given the greatness of Su and the relentless turn at AMD.