Earnings reports fueled gains for shares of Salesforce and Snowflake this week, the Nasdaq closed at a new high Friday, and there’s more news for Apple, Microsoft, Zoom and other tech stocks.
The Nasdaq and S&P 500 closed at record highs Friday after Federal Reserve Chairman Jerome Powell said the central bank gradually could begin pulling back on stimulus this year because the economy has met the Fed’s criteria on progress in inflation and employment.
Over on Real Money, Cramer says it may seem heartless, but the stock market is not a referendum on bloodshed and the U.S. economy is buoyant. Read more of his market insights, analysis of the Federal Reserve, and trading ideas on Real Money.
Salesforce (CRM) – Get salesforce.com, inc. Report stock climbed 4% this week after the company reported a jump in quarterly sales. Analysts at Piper Sandler raised their price target on the business-software stock to $280 a share following the results.
During an Executive Decision segment on his Mad Money TV show, Jim Cramer spoke with Salesforce Chairman and CEO Marc Benioff. Benioff said Salesforce had another terrific quarter that included a 23% rise in revenue and saw the addition of new customers like Ikea and insurance giant Geico. Salesforce also expanded its gross margins and saw solid cash flow improvements according to Benioff.
Benioff told Cramer that new clients like IKEA are undergoing digital transformations that require tools like sales, service, commerce, and marketing clouds, all of which will soon be integrated with Slack (WORK) – Get Slack Technologies, Inc. Class A Report to ease communications.
Cramer told Action Alerts PLUS senior analyst Jeff Marks that it was another inflection quarter for Salesforce as the cloud software company integrated its Slack acquisition to its broader business.
“What I really loved about Salesforce is that he [Benioff] talked about unicorns…he mentioned all of the different companies within the company that is doing so well. They’ve all lined up — Slack has lined up with Zoom (ZM) – Get Zoom Video Communications (ZM) Report, which has lined up with Snowflake (SNOW) – Get SNOWFLAKE, INC. Report to create a seamless enterprise augmenter… this is more augment than replace. Salesforce is at the heart of it,” said Cramer.
“It’s the largest venture capitalist in the valley. And he [Benioff] is one of the reasons why Robinhood (HOOD) – Get Robinhood Report is able to pull itself together and retain customers…he is a real mentor to Vladimir Tenev,” Cramer added.
Cramer also had strong opinions on Facebook’s (FB) – Get Facebook, Inc. Class A Report Horizon Workrooms, a newly-revealed virtual reality-powered experience aimed at allowing better collaboration among remote workforces.
Cramer called Horizon a ‘primitive’ version of Nvidia’s metaverse. Jim Cramer said if you’re really looking for dominance in the metaverse, turn your attention to Nvidia (NVDA) – Get NVIDIA Corporation Report.
“The way we work is changing. More people are working remotely, more people want flexible work options, and more people are re-thinking what it means to be in an office,” Facebook said in a statement.
The reveal followed CEO Mark Zuckerberg’s touting of the metaverse as a key part of the future of Facebook. The company is clearly entering its next frontier and, last month, Cramer explained what Metaverse means for Facebook.
Here is a breakdown list of the technology and FAANG stocks to watch right now based on their performance over the past week:
Apple (AAPL) – Get Apple Inc. (AAPL) Report said that it would halve, to 15%, its commission on first-year in-app subscriptions for eligible news publishers who are part of the Apple News service. The change comes after massive criticism of Apple’s current 30% fee from customers, app developers and regulators. “Apple today introduced the News Partner Program, a new slate of initiatives to expand Apple’s work with and support for journalism,” the company said.
In July, Cramer explained how he approaches Apple stock differently from fellow tech giant Nvidia, the semiconductor maker.
Snowflake stock jumped Thursday after the data-analytics software company reported mixed second-quarter results and analysts raised their price targets. The company posted a net loss of 64 cents a share on revenue of $272.2 million. Analysts polled by FactSet were expecting a net loss of 15 cents a share on revenue of $256.1 million.
Last week, Snowflake saw its biggest intraday decline since March after Cleveland Research in a report said signings growth slowed from the first quarter, while consumption growth was likely similar, at best, to first-quarter levels.
Salesforce (CRM) – Get salesforce.com, inc. Report rose this past week after analysts praised the customer-relationship-management-software company’s stronger-than-expected second-quarter results. Barclays analyst Raimo Lenschow raised his price target for Salesforce to $320 from $291 while affirming his overweight rating.
J.P. Morgan analyst Mark Murphy kept his overweight rating on Salesforce, which closed its purchase of business-communications platform Slack last month while raising his price target to $310 from $250. And, Stifel analyst J. Parker Lane kept his buy rating on Salesforce while raising his price target to $315 from $295.
Zoom Video Communications
Shares of Zoom Video Communications jumped after the company was the subject of a bullish note from Morgan Stanley. Morgan Stanley analyst Meta Marshall upgraded the stock to overweight from equal-weight with a price target of $400 a share. Roadblocks to wider margins are easing, creating a positive setup for the company, the analyst said.
The company settled an $85 million lawsuit over some privacy issues, which go back to the Zoombombing that happened during the pandemic. “I think that Zoom has to be more integrated into corporate, and this can really help, and corporate will not be put off by the payoff — they had to pay what they had to. I like the stock, believe it or not. I like the stock because I am a huge believer that Zoom is here to stay,” said Cramer.
“But they have to expand beyond Zoom…they did this call center and the company is incredibly successful. I think we need to wait and see,” Cramer added.
Microsoft (MSFT) – Get Microsoft Corporation (MSFT) Report announced plans to bring its cloud gaming service Xbox Cloud Gaming to Xbox consoles later this year, allowing gamers to stream games instead of installing them on their device. Xbox Cloud Gaming will follow up the company’s successful Game Pass service which allows users to download games from the library for a flat monthly fee.
Currently, Xbox Cloud Gaming is only available on mobile devices and PC’s. Earlier this year the company announced plans to develop dedicated streaming hardware that will hook up to users’ televisions.
The Federal Trade Commission has filed a new antitrust suit against Facebook after a judge threw out its previous complaint in June. The FTC charges that the social-media sultan broke antitrust laws by purchasing Instagram and WhatsApp to eliminate them as competitors. As for redress, the FTC wants the two popular platforms separated from Facebook.
Facebook told TheStreet by email: “We are reviewing the FTC’s amended complaint and will have more to say soon.”
Amazon (AMZN) – Get Amazon.com, Inc. Report has established a website to inform sellers on its platform about Congressional antitrust action against the retail colossus. Several bills have been introduced in Congress to curb alleged monopolistic practices by Amazon and other tech titans. The website has a box where sellers can include their contact information.
“We look forward to keeping you informed as we get more information about what this legislation could mean for you and providing you the opportunity to have your voice heard,” Amazon said.
Cramer this past week called out Amazon, a stock which many investors now see only as a pandemic stock. But the truth is that Amazon Prime is now a staple of many households and that isn’t going to change anytime soon. Cramer said that Prime is a steal at any price and that’s why Amazon also belongs in your portfolio.
Alphabet’s Google Health (GOOGL) – Get Alphabet Inc. Class A Report head David Feinberg is leaving the company to become chief executive of electronic medical records provider Cerner (CERN) – Get Cerner Corporation Report. Cerner, North Kansas City, Mo., says that starting Oct. 1 Feinberg succeeds Brent Shafer, who had said he planned to transition to the board. He’d been chairman and CEO.
Feinberg, 59, has served as vice president of Google Health. Google Health is the spearhead for Alphabet’s push into health care, with technology and initiatives underway to bring products to market. “Google deeply believes in the power of technology to improve health and wellness, and we have increased our health investments across the company,” Google said in a statement.
Last month, Netflix (NFLX) – Get Netflix, Inc. (NFLX) Report posted a rare decline in North American subscribers over the second quarter, and forecast weaker-than-expected additions over the summer months amid intensifying competition and a post-pandemic surge in outdoor activity.
Netflix lost 430,000 north American subs, the company said in its second-quarter earnings report last night, although its total worldwide additions of 1.54 million topped Street forecasts and took its overall total to 209 million.
Palantir Technologies (PLTR) – Get Palantir Technologies Report shares fell, after a New York Post report that one of its software programs used by the FBI gave unauthorized workers access to private data. The information came in a letter from Manhattan federal prosecutors in the court case against accused hacker Virgil Griffith, the Post said.
At least four FBI employees, all outside New York and not on the team investigating Griffith, had access to data through the Palantir software for at least a year, the prosecutors said. That data was recovered from Griffith’s Facebook and Twitter accounts, thanks to a federal search warrant, the letter said, according to the Post.
Earlier this month, Palantir reported second-quarter earnings that met Wall Street’s expectations and revenue that exceeded them.