Shortly. We start with amazon. It is sinking, as we showed, after a big earnings miss. Until tonight the stock has been on a tear, 28 in the last year, and 170 in the past two years. Could amazons run be now over, dan, what do you think . If youve been long it, its up 70 some percent from the lows in february. You have fantastic gains here. The guidance they gave was a little bit below expectations. Theyll probably beat that guidance. The stock trading at 780 or so. I think it probably has a floor here, in the near term, 750. I dont think the stock gets derailed. Theyve got a lot of good things going. I know the concern was aws sales decelerated. But the margins were better. So weve got to see what happens, how those margins, the retail margins pick up a little bit in the q4. I dont think people will sell the stock below 750. This is the holiday quarter, holiday sales, the allimportant quarter. Im going to be shopping on amazon for the holidays. Is that where you got your shirt . B. K. New shirt. Ill tell the story later. The most important metric i think for amazon, every quarter, is operating margins. Operating margins came in light on both a gaap and nongaap basis. Does it stop at 750 . I think dan makes a fair point. But, and here is the big but, the s p is at that critical level, 2130 or so level. Does this amazon quarter knock the s p down and does the s p in turn knock amazon down . I think theres a chance of that happening. Beginning of this year, amazon went from 700 to 500 in one month. Im not suggesting a 28 move to the downside now, but i wouldnt be surprised to see it trade high 600s, low 700s. I think you guys are being way too understated about what could happen here. Amazon came in as a stock that had not only a ridiculous valuation but the expectations were very high. Theres a lot of reasons why they may not make margins. Theyre good reasons for the company longer term. Theyre spending on logistics, theyre going to triple their content, double up their video. This was exactly what in 2005, First Quarter of sorry, 2015, First Quarter, is what took the stock on a roller coaster ride, basically straight up. To act like this isnt that big of a deep, especially when expectations for this company and momentum behind it was theres nothing this company could do wrong. Remember how bad it was when the stock traded at 300. Lets broaden this out for the consumer. Every retailer thats done poorly has blamed it on amazon, saying they stole the sales. Now that there is a stall on amazon, do we have a problem with the consumer . This is not a consumer problem, its an amazon problem. These numbers were fine. There was nothing wrong in their sales numbers. They were a little lower than expected. They lowered estimates for christmas, for holiday season. Amazon has proven to be not that on with their numbers, if anything theyve been overly conservative in the last couple of quarters. That could be a conservative number. To read through amazon from a number, thats not why the stock is down. Obviously. Let me ask you the upside, amazons run to the upside, did you take a look at amazon and say, oh, the consumer is strong . What i said because you didnt. Because you didnt. What i said was that you cannot get very bearish on retail until amazon cracks. That was my point. Theres sales in this quarter that was disappointing, 29 year over year. They just guided to about mid20s and theyll beat that. How do you know theyll beat it . Because they will. Because of this quarter . They guide very wide, tim just said that. If you want to extrapolate it to retail, when these guys are having lower margins in retail, that means it really is hurting other retailers. Theyre willing to self more stuff at less profit. Your point is a good one. For us to so you people complacent with the stock at 780, it sounds a little goofy. When i see guys like bill miller and he talks about a stock like amazon that continues to have growth all around, and well get gdp tomorrow morning, thats the sort of thing that big money is focused on right now. I dont think theyll sell the stock at 750 on a quarter like this, thats my point. When rates are going up, i no he thats later in our show, but in this environment where people are wondering, why did i pay this for this company, rates are zero, the center of the conversation right now on rates. Bill miller is absolutely proven to have nailed this story and many others. Hes probably making a longer term call on amazons business. Right here and now, this valuation if i was complacent, i apologize. That shirt from amazon is not complacent, by the way. Just so you understand, saks in the short hills mall. They closed it down. Okay. Give me a trade on amazon. Stop. Amazon. What i said was theres a very good chance that amazon in turn knocks the s p down and it becomes this Virtuous Cycle to the downside. You do no . Theres chance that this stock thats not going to happen between now and the end of the year. I dont know. Its just not. When you think about the concentration in the nasdaq why . Because apple, microsoft, google, facebook, and amazon, they make up 45 of the nasdaq. Theyre not going to abandon this trade, right here, right now. For you a, you would buy another 30 bucks . Too bad steve brazos isnt here. Cla there was nothing in thi that said its going to be a 2017 story when it comes unwound, when people get focused on his tenyear plan and all this stuff he wants to do with a. I. Look, the bottom line is hes pulled levers when hes needed to. I dont think hes trying to show the market anything. But when companies try to be more profitable, theyve done it. Hes growing logistics, thats why these guys are so far ahead. Thats a good thing for the company. To say that the valuation is supported 60 times 2017 is tough to do. All right. Show of hands, quickly. Amazon stock is down more than 5 right now. Who will buy it . No one. Lets turn to alphabet. Straight up tomorrow morning, folks. Spiking volumes, alphabet, that is. John ford is at the Stock Exchange monitoring it. We can get our smiles out for alphabet, up in after hours, not a lot changing. Google continuing to say the core business is doing well, driven by mobile and by youtube and particular, highlighting the growth of brands on youtube and how theyre continuing to invest there. Also talking about the growth of the cloud. Take a listen. As we focus our efforts in the cloud, we continue to see Strong Customer engagement. Last month at the horizon event we introduced a new business unit, google cloud. Our unique portfolio of products and services that let our customers operate easily in a Digital World with the performance they demand. Google cloud is of course growing off a small base. But alphabet board member diane greene running that business, has lots of experience with enterprise. Theyve got new partnerships recently. Well see if they can grow based on that, melissa. Well check in with you later, jon fortt. What do you make of the quarter so far . One of those really solid quarters where you had great top line performance beaded expectations, all that done on better margins, particularly in the core, while still investing. You heard the click there on the cloud and the other endeavors theyre betting on for the long term future. All this together while taking care of shareholders by announcing a 7 billion buyback, over 80 billion of cash. One of those solid quarters where youre still investing for the future. Why is there reluctance to keep that stock higher . Its now up under 1 from where it was initially. Pricing was a little bit weak. Youll see more questions around that. Youll also see more questions around what they actually acquire. Then the spend. Youll have more marketing spend, particularly around the hardware stuff such as the pixel. On the cloud stuff, do you think of this as a meaningful part of their business . I think theres plenty of room for them to compete with microsoft and amazon, but are people making too big a deal . Agreed. When you look longer term and look at estimates from idc or gartner, et cetera, theres going to be multiple winners in this space. Aws is clearly leading that for amazon right now. Google, microsoft, and a couple of others will get a big portion of that large market, 200 billion. Bob peck, who is manning for now the google call, or the alphabet call. What do you make of the quarter . I think it was a fine quarter. The way the stocks trade, clearly it wasnt terribly impressive, if you look at 800 and youre looking at an environment, youre looking for things that grow, that have some kind of a reasonable valuation relative to the rest of the market, i think Investment Capital flows this way. I dont think its a horrible buy at these prices, especially if you know that 800 is your stop. Every once in a while we play that would you rather thing. I remember. Remember last week, microsoft broke out with their all hypothetical high . The appear rehene h apprehensiot 60 bucks, what should be at best high single digits, when you look at google, earnings are expected to grow high teens, trading about 20 times. I would much rather google, considering the fact that he just said ten, total addressable market. Slow it down. Google will probably in 2017 start to make up some traction versus amazon and versus microsoft. How do you get in would you rather . Nobody plays the game but melissa. I have guys who play the game by themselves. I agree. What im saying is, though, growth is much more reasonable than microsoft. Can you explain for the entire audience, were at a place here for this company where theyre starting to grow ancillary businesses. Youtube which they bought for 1. 65 billion ten years ago is now 20 of the market cap and i think its still undervalued. You have a place here where the company has unmonetized businesses. Their cpc decline is being offset by programmatic stuff they do on the ad sales. These guys to me are the best combination of growth and valuation. I think ill play would you rather. Would you rather, guy adammi or alphabet . To me, again, the metrics in amazon are margins. To me, the metrics in google are paid clicks. Paid clicks were up 33 . The street is looking for much lower than that. Ill play with b. K. Now. These guys, who cares . You buy the stock, you know where your risk is. 795, 800, buy the alphabet. Tim, ill play with you now. Thank you. I would like to believe i made my point clear, i didnt even need to be in this game. The other thing about google that i will caution, the cops get tough in the next quarter. This is a company thats been on a bit of a tear for them. I dont think you have to go bananas on the stack. This is a much more defensive play with all these guys who think that the consumer is falling apart and the market is about to crash, this is the one to be in. Who said that . Consumers, im hearing s p is going down. You said the consumer is dead. Going to take down the s p. I mean, crash is a loaded word. You shouldnt be eating those during the show. Im going to go back to you for that. All i said was theres a good chance that amazon could take the s p down to the level that weve been flagging for quite some time, which by the way, if you look, 2130 are you horworried about the markets tomorrow . In terms of the trade in tech tomorrow, will it be challenged because of amazon . It has to be. It has to be, right . Youve got google on one side, amazon on the other, microsoft. Well probably go nowhere. The move from google to amazon. A stock thats gone from 300 to 800, using your own math, its disappointing, it trades down 5 , and thats a reason for the market to sell off . I said it traded from 700 to 500 in the beginning of the year. I said im not expecting a 28 move this time. What i did say was theres a chance it could trade down to 700. Given the fact that the s p in my opinion is at a critical level, theres a chance that both of them start to work off one another. Is that clear enough . Crash. I didnt say crash. Were going to a break. Google couldnt hold on to its gains. One of our traders is holding on to the stock. Why . Well explain. Plus a dramatic shift taking place in markets around the globe that you might have missed. Well tell you what it is and what it means for your money. Amgen moving down. Weve got a special fast money report. Much more fast still ahead. We love knowing whats happening. So the nest cam Security Camera looks after things and alerts your phone if somethings up. Hey, need a glass . No matter what it is. Hey, dad. Welcome back to fast money. Twitter jumping early in the day 12 after beating expectations. Now its shutting down its sixsecond video app vine. None of it seemed to help the stock. It was a big win for twitter that the stock wasnt down 20 . They need to see some stabilization, at least the Way Investors are thinking about the volatility in their results. Listen, their one bright spot maybe is that daily active users were up like 7 year over year. Monthly active users were up low single digits. It showed possibly increased engagement. Maybe that drops off once we get by the election. I dont know. Are we listening to the same number . Their estimates are going up for the first time in a long time, thats very bullish for this company. The monetization is a concern. Im surprised the stock is not up a lot more. People still need to see more out of this company. I would have thought this Company Delivering somewhat positive guidance. These guys are debbie downers every time they give a call. The fact that this was relatively positive, to me i thought the stock should have been up 5 . Would you buy . No. Listen, ive tried it a couple of times. I get what dan says, its a unique property. I see the utility of this company, i get it. Its too frustrating to watch this company wilt on the vine because theyre not doing anything. The biggest innovation is to put a sticker on the top of the thing to show me theres more tweets there. Are you on twitter right now, on this desk . Oh, were talking about twitter . Im kidding. Yes, im on twitter right now. Everybody is. I think there is huge value is. You just wish the company would find a way to harvest it. We could come back in a couple of quarters and say that late october quarter, that was the quarter they finally turned it around. One of the things weve said is, the best thing that potentially could happen to twitter is that people walk away from acquiring twitter. If and when they figure this out i think it will be worth a lot more than 25. You own the stock . I think you have to. Look, i think the risk reward is 15 on the downside, which is percentagewise, 10. 5, 11 . Whatever it is. And the upside to me is north of 25. Lets give bob a break here from the Conference Call. What did you make the twitters quarter . A couple of things. People thought the quarter could have been worse, the guidance is still weak. Theyre still calling for low single digit growth, worse than people had thought. The question is, whats next, how do you turn this around . If m a is not on the table right now, what happens in 17 . Meantime youll have layoffs, right size the cost structure in the meantime. Bob, thanks. Mr. Peck, real quickly, we keep getting headlines, snapchat came out 25 to 35 billion. How do you get your arms around the uniqueness of the twitter property and say to yourself, how could it only have an 11 billion enterprise value . The real thing for twitter is what is its real verified user side, and whats the its monetization potential . In the u. S. Users only grew 1 . How do you get that to grow and monetize . Bob has two calls to get back on in nine minutes, get back on it, bob. How many monikers do you have on ikermonikers . Bogus ones. He can barely type in his real account. I was asking how many different youre like guy the iron man, guy the stock guy. Thats the point, how do you know who their users are, you could have 21,000 eggs following you, those Little Things that show up instead of the picture. Still ahead, google hanging on to its gains. The latest on those reports and Conference Calls later this hour. Youre watching fast money on cnbc, first in business wor worldwi worldwide. Heres what else is coming up on fast. Its the most wonderful time of the year announcer indeed it is. B. K. Says the market is giving investors the ultimate gift. Hell explain. Plus Rick Santelli is going to let loose on just what has him so furious when fast money returns. I am benedict arnold, the infamous traitor. And i know a thing or two about trading. So i trade with e trade, where true traders trade on a trademarked trade platform that has all the. Get off the computer traitor i wont. cannon sound i wont. Hey, evan. So, youre stuck at a work thing. With directv and at t you can stream all your favorite shows without using your data. That makes you more powerful than a table for 60. Wednesdays are the new thursdays or the mandatory after party. How early is too early to leave . Youre not going anywhere. Im not going anywhere. Its your tv, take it with you. Watch all your live channels, on your devices, data free. This is the rx. Elevated. Rx hybrid and rx f sport. Get up to 5,000 customer cash on select 2016 models. See your lexus dealer. Mobility is very important to me. Thats why i use e trade mobile. Its on all my mobile devices, so it suits my mobile lifestyle. And it keeps my investments fully mobile. Even when im on the move. Sign up at etrade. Com and get up to six hundred dollars. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley welcome back to fast money. Coming up, alphabet, amazon, amgen, all reporting earnings in the last hour. Amazon and amgens calls are under way. Deirdre is manning the amazon call. Meg terrell is on the blue phone listening in to amgen. First, the move in rates. The u. S. Tenyear yield hitting its highest level in may. Lets get to Rick Santelli in chicago. Hey, rick. Hi, melissa lee. What did you make of this move higher . To me, its a been a long time coming. Interest rates closed last year in middecember with a big break in the market. We were at 230, we started to move down. The high of the year was established the first day of the year, 227. Weve never looked back. If you look at that big move that started in december, it started around 230. It went quickly to 166. Halfway back, thats 192. I fully suspect thats where this market is going to go. And potentially where it closed last year. This story is all interconnected. The dollar index, the last five trading days, has been up on the year, finally. It closed last year at 9863. We played around with the upper range in january. From february on, it never looked back until this week, its in positive territory. I think those two stories, along with the notion of how negative rates, what europes rates are doing, what japanese rates are doing for most of 2016, dragged our rates along with. I think all of the central banking policies that made those moves and ultimately created a lot of Deutsche Bank landscape scenarios where Financial Institutions cant really turn a profit, you need positive Interest Rates, i think all of that has finally started to infect the psyche of investors. If central bank verers have don their best the last seven years, i think investors understand that. I dont think they want to be running in that parade anymore. I think this will continue in jgbs to some extent, it will continue in the european sovereigns and in u. S. Issues. I think that many traders need to try to look at the fundamentals in a bit of a different way. Believe me, 2014, parts of 2015, have performed much better in many economic ways than 2016. So i dont think its completely able to be tied to the strength in the economy. All right. Rick, thank you. Rick santelli from chicago. Brian kelly is at the smart board. You think the holidays could be yielding a holiday gift . I see what you did with that, thats very interesting. What rick talked about, he talked about 192 potentially on the tenyear. I think there is a case to be made for that. What you have to ask yourself as an investor is, are rates going higher for the right or wrong reasons . The right reasons are the economy is getting better. The wrong reasons are people are fleeing away from bonds. I dont know if its 100 clear. I think its the wrong reasons at this point. Lets look at what happened today. We started the morning with a good uk gdp report. That got uk bonds going lower, uk yields going higher. Now here is our tenyear, okay . Rick talked about 2014, the poor performance then. Look at this down trend line for the last year. This is u. S. Tenyear rates. We bought them down here closer to 1. 5. This represents 180. Today we closed 185. If we close above 185 for the week, then i would get more competent that were going to retrace back up to this down trend line which is about 2 . That gets to ricks 192. And 2 on the tenyear, that would probably take us right into the ceiling. Thats your holiday gift, because i dont define halloween as a holiday. Do we invite him . He spends a lot of time here, lets leave him there. Come on, b. K. , come on over. Bring the chair. Wow, i get to sit here. Thanks for having me. Im a long time listener, big fan, first time caller. Liar. Youre saying for the wrong reasons, rates are going back to that long term trend line. You know whats crazy to think about 2013, the tenyear treasury yield was 3 . Here we are much higher, 2130 and rates are maybe going to get back to 2 . To me it seems like a weirdo situation. We know that i dont know, i mean, it just seems like if rates are going to go back too fast, equities have to come down. I think so, right . If were in an environment where people are buying equities for yield when theres a yield in another instrument, theyre certainly going to go for that. Guys, yields are going higher but inflation is ticking higher. Service pmis, everything is better. Inflation. Real rates are also staying flat. Whats going on on here is rotati rotation. And i recognize that you know, it was tina on the way down, it has to be no tina on the way up. To say this is a terrible moment for the stock market im fairly sure i did not say this was a terrible moment for the stock market. I think youre trying to put the crash on me. All im saying is rates are going up for the wrong reasons. Does it mean stocks crash . I have no idea. I do know it will limit the upside. Lets assume rates will go higher, eventually. What is our higher rates playbook . We say for a long time, i thought rates are going down, i still think theyre going down. If rates start to tick higher, names like at t and verizon will only bid up because of the yield, are going to get whacked. At t has their own issues with the acquisition theyre trying to make. With that said, look at the performance of both these stocks over the last month, month and a half. I still think theres downside there. The only time i used the word crash is when i was mentioning Kevin Costners character in the movie bull durham. You remember. Yeah, sure. Pete usually sits over there, last week he said his playbook is the money center banks, bank of america. He said bank of america is going to be 18 before the year is out. If rates are really going back, it will be at a new high. The money centers, jpmorgan, it seems like an easy trade. Not my trade. You see, you did it again, didnt you . Because youre eating gummies and chewing. Why would you do that . While ear banks are struggling to make 52week highs, i do think usb made an alltime high today. And theyre going to pop a red gummy in. Theres argument that Interest Rates are going up for the european banks. If you look at the eufn etf, thats the way to play. The european banks were the worst trade, not only on a sector basis but a relative value. The charts, its an interesting breakout for the First Time Since march of 2015. So, you know, normally i think its a little more difficult than it used to be. Normally i would say lets go back to the better performing stocks, cvs, community value, the drugstore. You may want to go there. Im a little concerned whats going to happen with the Affordable Care act last year. I would actually just stick with the currency market. That makes the most sense to me. Uup, buy the dollar. Where can the dollar go in this environment where youre not feeling terribly strong, talking about the u. S. Economy . Thats the thinking about the dollar. What happens when the economy gets better . The dollar goes higher. What happens if we have i agree with that. A weak economy . What happens if we have a tough time . People rush to the dollar for safety. At least on a risk reward basis, weve got a pretty good shot. Ill stay right here. I like it here. Our coverage continues on alphabet, amazon, amgen, all on the move in the after hours. Plus make or break time for the Energy Sector tomorrow as two of the biggest oil names, exxon and chevron, report before the bell. Someone just made a huge bet on one of them, well tell you which one when fast money returns. Little. Youre making money now, are you investing . Well, ive been doing some research. Let me introduce you to our broker. How much does he charge . I dont know. Okay. Uh, do you get your fees back if youre not happy . dad laughs wow, youre laughing. Thats not the way the world works. Well, the worlds changing. Are you asking enough questions about the way your wealth is managed . Wealth management, at charles schwab. Welcome back to fast money. An earnings alert on amgen. Meg terrell has been monitoring the call. Shes got the latest. We have to compete with the red phone of bob peck. Amgens stock not reacting so positively, really no big product growth for amgen in the quarter. And a lot of the beat on the earnings side came from a decrease in r d spending. Q a just started. Interesting first question was about whether under new administration if there was a repatriation of cash made available, sort of a tax holiday, what amgen would do with its cash. They were just answering that suggesting they may look external. Maybe something to buoy some of these fears that m a is not picking up toward the end of the year. The ceo making interesting comments about pricing, listen to this. We accept that our products need to deliver clear benefit for our customers and accept that we shouldnt be rewarded when they do not. We have value based contracts in place and expect to do more. Talking about value based pricing and make commends that they expect to see more of these valuebased contracts, pricing drugs according to how much value they bring over whats currently available. Its very interesting to hear those volunteered comments at the beginning of the call. The earnings seem to be fairly good. Thats right, its interesting to see a split with newer companies and companies with older franchises. Today we had alexion reporting before the bell, that stock performing pretty well since that report. Celgene also up 6 after reporting a positive quarter, people happy with how their franchises are doing. Biogen on the opposite side of that, its multisclerosis drug, folks are worried about the pricing. Analysts call it solid. Vertex down as people fear whats going on with their pipeline of Cystic Fibrosis drugs. One person suggests its down because were not seeing a lot of m a right now, nothing to keep a floor on these biotech earnings heading into the election, which is the biggest fear on everybodys mind right now. Were halfway through earnings season. The biggest one to watch is going to be next week with gilead. And on every single pricing call, i imagine pricing is brought up. Thats right. A lot of questions about the election, pricing, and prop 61 in california. This issue is really fascinating, the drug industry just hates this proposition. Ill be interested to see how this turns out. Meg, get back on that blue phone, thank you. So, guy. A couple of trades. Kite pharmaceuticals, had a huge run, theyve given it all back. That gives you an opportunity. A name like kite, to get ahead of earnings. Against 42ish where it traded down to in may. Amgen, real quick, they beat, revenue, beat. This company to me on valuation is cheap. Its basically given up today it made during the day. I still think amgen is the screaming buy. I have to go to tim because his middle name is biotech. Some of these other guys starting to give some insight into what they may or may not be doing on m a. It helps gilead. The valuation is dirt cheap. If youre actually seeing profitable, we know their hepc franchise is under pressure. I like this company. I think a lot of it has been momentum and a company that people have been fearful how theyre going to spend that next dollar. Big oil out tomorrow, traders, some traders place some pretty big bets in the obligations market today. A lot of activity, exxon, chevron, these two stocks dont move a whole heck of a lot. When you think about whats going on here, we were just talking about the dollar. We were talking about things that are affecting inflation, that sort of thing, rates. Listen, both of these stocks are up 12 on the year. They both have fat dividend yields. Obviously theres a push and pull between the macro. My sense is big integrated oils have found a bottom near term. Oils seem range bound between the mid40s and low 50s here. I think people will continue to wait for a kind of earnings reinflation, take that dividend. Im not expecting a whole heck of a lot of movement. Look at the xle, its banging up against that resistance level at 70. These two make up about 30 . Thats probably a better way to play it, in my opinion. Dan, wouldnt you be more interested protecting these things going into an opec meeting . The level of skepticism is extreme high. This is some of the stuff people are doing in chevron and exxon, you can sell calls against it, take a little extra yield, it gives you buffer to the downside. Thats a preview on the show. I just said no flat out. Exxon and chevron up 12 year to date. It is, so exxon, for example, has traded from 95 now down to this 86 1 2 level. If dan is right, and you talk about percentage, ill put it in dollar terms, a dollar and a half or so is what theyre looking for up or down. If you get that dollar and a half to the downside, that gets you to 85 bucks, which is the midpoint between the range weve seen over the last six months. That gives you a great opportunity. What happens this sunday . I actually think that to me, oil trades in some kind of a range. Probably 40, 50. I actually think 50 might be the floor. Thats because the saudis need it to stay at that level. Theyve chained oil ministers. Yes, there is going to be some volatility. You can trade crude. But if you just want to play the game, then i think Something Like exxon, you sell a call, get the dividend, product yourself a little bit, thats not a bad play. These guys are talking about integrateds and being relatively upbeat about it. Look at the europeans, these have bigger yields, a currency tailwind. For more options action, check out the full show tomorrow, 5 30 p. M. Eastern time. Shares of amazon as we head to break, the company posting a miss on earnings. Here we are down about 5. 2 in the after hours session. 776 is the level. Well bring you the headlines. The Conference Calls are about 16 minutes in. Youre watching fast money on cnbc, first in business worldwide. Hey nicole. Hey i just wanted to thank your support team for walking me through my First Options trade. We only do it for everyone gary. Well, i feel pretty smart. Well, were all about educating people on options strategies. Well, dont worry, i wont let this accomplishment go to my head. Im still the same old gary. Wait, you forgot your french dictionary. Oh, mucho gracias. Get help on options trading with thinkorswim, only at td ameritrade. Welcome back to fast money. To an earnings alert now, amazon shares are tumbling in after hours trading after a quarter miss. The Conference Call is 19 minutes in, deirdre. Thats right, melissa, but guess what, they started right at the top with the q a portion, with amazons ceo. We did get what was top of mind for analysts. And addressed right off the top were amazon widening International Losses and higher costs this quarter. Have a listen. What youre seeing essentially in the second half of this year is the stepped up investment primarily around Digital Content and further center investment. Also things like echo and alexa which were adding a lot of resources to, india, and aws, as we add people there to support Additional Service rapid growth. Guys, amazons revenue outlook for the fourth quarter, allimportant because of the shopping season, was the disappointing part. Hes saying theyre getting ready for it as their costs are rising and as they go deeper into other businesses like shipping. Theyre moving further into media with video content swells groceries. The cfo said groceries will be key going forward. And he reiterated that Digital Content made up a big part of their rampup in investment. There are some bright spots. This was amazons sixth straight profitable quarter which provides consistency for investors who have been wanting to see that for a long time. Amazon web services continues to be its Fastest Growing profit driver. It actually continues to outearn amazons retail business. Jeff bezos doesnt do the Earnings Call but he spoke earlier in new york. He mentioned aws had seven years of runway before it faced like minded competition, and of course it still dominates this space. Analysts say amazons stock ahead of the earnings was priced for perfection, so perhaps its not a surprise that its tumbling now that those earnings came in light. But a number of them, i think its about half a dozen, have price targets for amazon of 1,000 plus. If you did see earnings come in under expectations, it could be a buying opportunity. Back over to you. All right, deirdre, thank you. Look for more on amazons earnings. Lets get to bob peck, who has switched red phones. What did you make of the quarter . Overall, a decent quarter. The tough part is any slight miss can have it pull back. The top line grew low 30s, 33 , down from recent growth rates of around 40 . The margins were weaker. You heard some of the clips there, spending on content, india, further centers. North america had its least expansion in recent quarters. Intermen international, you heard, was down. Aws was good, expanding margins. Incremental margins was only 2 to 3 , that had been double digits in prior quarters. For the guidance, its a little bit light as well. Revenue is below what people are looking for. Margins are half of what people were looking for. So at this multiple, around 40 times free cash flow, any of those little missteps will cause a pullback in stock. Bob, theres 49 analysts who cover this stock, five have a hold, the rest have a buy. Youre one of the holds. Why are you position that can way, it seems like youve been that way a little bit here. Yeah, thank you. The reason why is people have been uniformly bullish on the stock. We thought any sort of misstep could hit the stock. Sure enough, you got that this quarter, from the top line as well as the margin line. Whenever we see one thing too far one way, too bullish, especially that multiple, 40 times free cash flow, any little misstep can cause a pullback. Bob, well ask you to grade these reports, amazon and alphabet. Amazon, its a large market, still strong growth. They are having more spending. Ill give them a b. Google, theyre buying back shares, i give them a a. In the game of would you rather, is it fair you choose alphabet . We have a buy. Thank you, bob peck, the bob peck. G plus, gets an a, the consumer is not done. Nice job, tim. Go to your room and study. What are the factors on tech tomorrow . Nothing seems to stop this market in general. Although i dont think that, listening to what bob had to say, i dont think this is going to be a quarter as people buy it up. Tomorrow, i could be wrong, ive been wrong once or twice before, it shocks me every time. Go back to apple, look at the reaction it had a couple of days ago to its results which werent disastrous but the stock had a big run up. I dont think its a bad thing that you have some of the biggest drivers in the market kind of consolidating, moderating a little bit. With amazon, as long as you dont see it get sloppy and trading below 750, i think it probably maintains that range between 750 and 825 or so, which was the high, the recent high. Were seeing some volume, basically unchanged in after hours session. May i ask you a question . What was the worst grade you got . Where did you go to school . Harvard. Be honest. Organic chemistry. What did you get . I got a c. Whoa i was premed. And then i wasnt premed. Were you allowed back in the house . I mean, it took a lot of work. They changed the locks, lets put it that way. I was hoping for cs my freshman year. Aws, they did 32 billion in this quarter in revenues, amazon. Aws did 3. 2 billion. I can do that math in school. Thats 10 . When that gets more to 20, 25 , well talk. Until then, lets not make a big deal out of this. Ill say again, im not calling for a crash. I am saying i do think theres a chance you said he would. Amazon could trade down to the high 600s, low 700s. He wants to clarify. Can i clarify something . You never called for a crash. Lets leave it at that. Its very clear he didnt call for a crash. Well leave it at that. Coming up, final trade. The t i. T. Orchestration to a global outerwear manufacturer, allowing them to handle the recent popularity boom in fanny packs. Its pretty fly. Unless being 90s is your thing. Well, cdw and hpe services gave them the flexibility they needed to scale up their scale up their cloud resources, making sure supply meets demand. Poser [ classic ringtone ] whats crackalackin . Hey, did you remember to set the vcr . Increased flexibiilty by hpe services. I. T. Orchestration by cdw. Is it a professor who never stops being a student . Is it a caregiver determined to take care of her own . Or is it a lifetime of work that blazes the path to your passions . Your personal success takes a Financial Partner who values it as much as you do. Learn more at tiaa. Org they made a mistake. The check they sent isnt enough to replace your totaled new car. The guy says they didnt make the mistake. You made the mistake. I beg your pardon . He says, you should have chosen fullcar replacement. Excuse me . Let me be frank, he says you picked the wrong insurance plan. no. I picked the wrong insurance company. with Liberty Mutual new car replacement™, well replace the full value of your car plus depreciation. Call and if you have more than one Liberty Mutual policy you qualify for a multipolicy discount, saving you money on your car and home coverage. Call Liberty Mutual for a free quote today at thats liberty stands with you™. Liberty mutual insurance. Before the final trade, tim has got a big special event coming up. Tell us about rocktober fest. At the hard rock cafe, a leg to stand on, one of the greatest charities in the world. Theyve been doing this for a decade, a great charity. Watch us tonight, yes, thats me, i can sing. Pretty well. Cool. Its a very cool event and a great cause. Tim, final trade. T. O. T. No, shell, lets go with that one, even better. Such conviction. He saw some retail xrt, time to take a profit. Twitter. I like the levels down in the midteens. Just watching tim play tambor even like you saw is worth the price of admission across the street there. As opposed to the drums or singing. Cisco. The csco kind. People say its a negative. I say positive. All right. Im melissa lee. Thanks for watching. See you back here tomorrow at 5 00 for more fast. M mad money starts right now. My mission is simple, to make you money. Im here to level the Playing Field for all investors. Theres always a bull market somewhere, and i promise to help you find it. Mad money starts now. Hey, im cramer. Welcome to mad money. Welcome to cramerica. Other people want to make friends. Im just trying to make you some money. My job is not just to entertain but to educate and teach you. So call me at 1800743cnbc or tweet me jimcramer. We understand the term better than expected. We know that when a Company Reports sharply better than expected numbers, its stock goes