Most of Wall Street is scrambling today as narratives and stock prices shift within the “Magnificent 7.” Consensus may have been caught off guard, but this week’s earnings reports confirmed our analysts’ long and short calls.
Amazon (AMZN), a Hedgeye Retail “Best Idea” Long call, was up over 7% today while Apple (AAPL), our Global Tech research team’s top short idea, was down.
“We said a couple quarters ago, when the stock was closer to $100, it would test new all-time highs,” Retail analyst Brian McGough said of Amazon, which saw its stock price surpass $170 today.
“The print was great, which was what we expected,” Retail analyst Jeremy McLean added. “We thought the numbers would look really good. Upward revisions continue to happen. We’ve seen three quarters now of really good accelerating trends and upside to numbers.”
Few analysts are bearish on Apple. Those who are believe the tech giant’s problems are limited to China. Our analyst Felix Wang has repeatedly said that’s not the case, and last night’s earnings call proved that to be true.
“Bulls will point to the fact that Apple returned to growth 2% growth. Oh my God, 2% growth. Apple should be surging, right? Not so fast,” Wang explained. “Only one segment showed growth in the December quarter, and that was the iPhone, but that was because they were comping a 9% decline from a year ago.”
“China gets all the blame from analysts when you talk to them about Apple, but it’s not just a China problem. This is so important to my short thesis. If you really dig into their earnings statements, there were multiple red flags, which I wrote to clients last night.”
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