Stocks rise after Big Tech crushes earnings—Five pros on what the numbers mean


Amazon, Google parent Alphabet, Apple and Facebook reported better-than-expected quarterly earnings Thursday.

Five pros break down the company earnings and why they don’t see the gains ending anytime soon.

Howard Ward, CIO of growth equities at GAMCO, applauds Amazon for its long-term focus. 

“When you look at Amazon in particular, Amazon is a stock that people that use valuation as a reason not to own Amazon ever since it went public, and that didn’t work out very well. It worked out very well for Jeff Bezos, on the other hand, to become the richest person in the world using a management philosophy of forgoing short-term profits. I think that has turned out very well for him, and I think there’s a lesson in there not only for other companies and their approach to managing their businesses, but it’s a lesson for investors as well, because investors that took that long-term ride with Jeff Bezos have done very well.”

Alan Patricof, founder of Greycroft, sees the threat of regulation lingering over these companies. 

“I think it’s inevitable that there’s going to be more deep observation of all these companies, and everybody’s going to face up to the fact that they are basically utilities. You can’t survive today really without Facebook, you can’t survive without Google. Google represents 90% of the searches. Think about that. No matter what you do, if you’re sitting there, you want to find some information, you have to go with Google … Anything that people are so dependent on is something that becomes a utility, a public utility, which means something has to be done to make sure that our public utility doesn’t take advantage of the public in one way or another. That, to me, it’s inevitable there’s going to be some regulation.”

Ann Winblad, managing partner at Hummer Winblad Venture Partners, says these reports highlighted how tech is evolving to meet the challenges of the pandemic. 

“I’m surprised how well Facebook actually did in their advertising revenue. I had high expectations of cloud revenue for the enterprise for Amazon and Google, and Google is making great progress on cloud revenue. Apple was stunning. All of these companies, first of all, demonstrated that … they can operate in extraordinary circumstances. For all companies operating long term, this way is going to be really challenging — to maintain talent, to maintain innovation.”

Mark Mahaney, lead internet analyst at RBC, sees promise in Facebook’s report. 

“I think Facebook showed that its ad model currently is more resilient than Google’s. There are two interesting numbers that came out of the Facebook print — one is that they disclosed that they now have 9 million advertisers; their last disclosure was 8 million. And the second one is that they’ve disclosed that their top 100 advertisers accounted for only 16% of their total revenue; last time they disclosed that it was 20%. So they are diversifying their advertiser base and they’re dramatically increasing it.”

Jim Cramer, host of CNBC’s “Mad Money,” is in awe of Amazon’s results. 

“Every conference call last night, with the exception of Google, was incredible. The power of these companies is extraordinary … Brian Olsavsky, he’s the CFO of Amazon, when he talks about the idea that basically, ‘We didn’t know we were going to make billions of dollars more than we did — not tens of millions, not hundreds of millions — billions.’ What a juggernaut, the most impressive of last night.”

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