Welcome to the latest episode of the Full-Court Finance podcast from Zacks Investment Research where Associate Stock Strategist Ben Rains breaks down the latest quarterly financial results from Facebook FB and Apple AAPL. We then dive into more fundamentals and what to expect from both companies down the road to help decide if either tech giant’s stock looks worth buying at the moment.
U.S. stocks surged Monday with all three major indexes up on the back of positive U.S.-China trade war sentiment, better-than-feared quarterly earnings results, another U.S. Federal Reserve interest rate cut, and solid U.S. jobs data.
Apple stock also popped to yet another new high Monday, with the iPhone powerhouse now up 13% in the last month and 63% in 2019. The company posted stronger-than-expected Q4 fiscal 2019 results on both the top and bottom lines last week. Plus, the firm’s iPhone business stabilized somewhat and it is likely to return to growth in its key smartphone unit and Greater China after a tough 2019. Meanwhile, Apple’s services unit continued to shine.
Wall Street and investors will be watching closely to see if Apple TV+ will be able to compete in a streaming market that will soon feature Netflix NFLX, HBO T, Amazon AMZN, Comcast CMCSA, and Disney DIS. Apple’s wearables, home and accessories division also looks strong heading into the holiday shopping period as it competes against the likes of Google GOOGL and others.
Apple CEO Tim Cook is also sanguine about the U.S.-China trade war and has remained in contact with President Trump to help try to keep Apple’s core products off the tariff list.
Moving on, Facebook is still by far the most important and powerful social media company even with Snap SNAP shares up big this year. Plus, Twitter TWTR tumbled after is posted disappointing quarterly results. Facebook and its broader family of services, which includes its namesake platform, Instagram, WhatsApp, and Messenger, have continued to expand and now reach roughly 35% of the global population.
Clearly, Facebook and CEO Mark Zuckerberg continue to face political pressure. Nonetheless, Facebook seems poised to expand and pull in more and more money as advertisers find it harder to reach consumers in a non-ad supported streaming TV age.
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