“Technology stocks were mostly lower Monday as shares of Yahoo Inc. slipped on a Bernstein Research downgrade,” Benjamin Pimentel reports for MarketWatch. “Meanwhile, shares of Apple struggled to stay in positive territory.”
“After rising earlier in the session, the stock slipped nearly 1% to $522.80 after the company said its AppStore has recorded more than 40 billion downloads,” Pimentel reports. “Shares of Amazon.com gained 3% to $267.07. The stock reached an all-time high of $269.30. Morgan Stanley upgraded the stock to overweight, arguing that the company is poised to gain more [Gross Merchandise Volume (GMV)] market share.”
Pimentel reports, “Also posting solid gains were shares of Facebook Inc.”
Read more in the full article here.
So a company that actually lost money last quarter hits an all-time high while AAPL continues to flounder despite the company having record profits quarter after quarter. Wall Street is totally out of touch with any reality and absolutely sucks.
I thought investing had everything to do with the future and potential growth. Taking the present and applying money to it is just gambling isn’t it?
Apple has to constantly develop to maintain its leadership position. Much more precarious than Amazon that has built a proven model of sales, and only has maintain a willingness to forego profits to continue its voracious gobbling up of markets and share (putting a lot of other retailers out of business in the process). There will come a time when Amazon controls so much of the retail channel that it can crank up its margins just bit to increase profits by a whole lot. That’s my theory on why investors keep paying more for Amazon shares.
yeah, that is the speculation. For Amazon to be valued like Apple, they only need to increase their margins.
By a factor 302, or 30100%.
You’re giving investors too much credit.
I know…..
Finally, someone who gets it. Nice going spark. Nice to see someone who isn’t throwing around the manipulation, conspiracy theory all the time.
Is it as simple as this having nothing to do with quality of products and services and everything to do with perception of growth potential.
Amazon sells slippers, lamps, TV sets, … and Apple computers and devices. What does Amazons good results have to do with Apple? Are we afraid they sold Apple products and slippers? In the end, people use Apple products to buy stuff from Amazon and Apple continues to take market share in the USA from Android products.
Question: What small percentage of Amazon’s profits come from selling Google’s Android crap? Apple’s profits come from Apple products and services and Apple stuff billions in the bank all the time around the world. Apple’s federal taxes were 1 out of every 40 dollars paid by all companies, What was Amazon’s taxes?
I agree that Amazon should not be compared to Apple as a “technology stock”, but as a “growth stock” that is fair.
But Apple, with a P/E of 11 and Amazon with a P/E of 3835.
So which stock has more “growth” potential?
Market share is easy when profit is not required and losses are of trivial concern. If Amazon want to make a profit, market share will suffer. A few quarters of increasing losses and/or declining market share and the market will wake up to the fact that Amazons business “strategy” is a no win game unless they can force everyone else out of business before Wall Street has its epiphany: Amazon is the worlds largest profit-less company and doesn’t deserve a PE of infinity/1 and, since there is not likely to be any profit with market share, there is no good reason to give it a stock price at all.
So if Apple starts a bank with credit card and iOS users buy stuff at Amazon with their Apple credit card then Apple could make more profit off Amazon sales than Amazon as they take their 3% cut of sales.
Yahoo lists Amazon trailing PE for past 12 months as a massive 3195. Its forward PE for year ending Dec 2013 is 154 .
Does that mean they expect earnings to go up by more than 20 times this year alone? Or to put it another way…by 2 THOUSAND PERCENT? Either that or they expect its share price to fall by a similar amount.
GOOD LUCK!
As old Jewish saying goes: “I’d rather be the worst merchant than the best manufacturer”
Unsolicited thoughts: Folks should quit worrying/complaining about the share price or perceptions of inequality in the market. Reading The Intelligent Investor and following it up with something on the mechanics of how to identify good companies and do a valuation would be enlightening for many here.
Yeah, sure. Easy for you to say since since no one has picked your bones clean from your skeleton like Wall Street has done to Apple shareholders. It looks to me like Wall Street is trying to build an M1A2 Abrams tank on top of a flimsy cardboard box by giving Amazon such an astronomical P/E.
You don’t know my positions. The point is, don’t let the market worry or upset you; the market eventually trends to where it should. Apple’s a great company but the current irrationality should not surprise you. The recurrent claims that, “this time it’s different; Apple is different” make me shake my head. Human behavior hasn’t changed. I think it was Buffett that said over the long-term the market is a weighing machine but over the short-term a popularity contest. Learn to invest, not speculate. If these temporary fluctuations bother you, you and I aren’t even playing the same game. Again, learn to invest, not speculate… be rational, be aware of history — you may do OK. Many won’t because they’re chasing market sentiment.
BTW, I don’t mean to be condescending here. Most people buy/sell because of emotion. They have no idea how to actually value a company. They are speculating but don’t even realize it. The book I recommended is a classic and details a framework in which to think about investing. I hope it helps someone.
What is Amazon? In simple terms, it is a big warehouse with a shipping contract. Why does Apple not give Amazon a heart attack by using a few Billion (Say 10Billion) opening up an Amazon look alike….and drive Amazon into bankruptcy.
Same goes for Gurgle. Do search better than Gurgle. Then manufacture a gadget (some kind of modified iPhone like device) dedicated to taking100 HD picture per minute (Front, Left, Right,and Back). Offer these devices to Apple customers, such as those who regularly buy/upgrade a computer, have bought several models of iPhones dating back to iPhone 3GS (say), and regularly spend money on iTunes. Offer an incentive, such as, keep the high speed camera and/or $0.01 per picture. Whatever makes sense. Those who take up the offer mount the device on their vehicles…..and BINGO within a month you will have street view throughout the world. Blot out faces and number plates an do an audit of the pictures…….this can be done by similar group based methods to make sure someone isn’t playing ‘silly buggers’.
Apple needs to start stepping on some toes now that everyone else wants to step on Apples toes.
Tim Cook definitely needs to be as greedy as Jeff Bezos. Everything Apple does, Jeff Bezos just makes a much cheaper copy of it and Wall Street goes gaga.
Apple should just move into cloud services with about a half-dozen server farms and then also start offering “all you can eat” media content. Hit Amazon where it hurts by firing a couple of torpedoes amidships. That might just shake Amazon shareholders out of their revelry. Apple has to do something with all that spare cash to send a wake-up call to Wall Street to stop it’s smurfy love jones with Amazon. I don’t want Amazon to go out of business. I just want to wipe that goofy grin from Jeff Bezos mug as he tramples all over Apple investors’ pride.
NICE!… BRAVO!
Needs to happen. Someone has to make the decision Steve?
I will never buy stocks again as it is very ridiculous to know this !!!!
Ridiculous. If Amazon increased sales by 10 times they still would never be able to grow into their PE ratio. When the valuation of a stock has nothing to do with earnings and earnings growth then the whole market is a sham. Some people are going to lose a lot of money on AMZN in the future.
Yup
The danger of the Amazon ‘bubble’ bursting, is fuelling the hype. All the big investors are well aware it could happen any time and thus they are compelled to push the stock in a self-feeding frenzy. The fear of a rational stock adjustment is a monstrosity no one is willing to contemplate. All it takes is one – just one, major sell, and the whole farrago comes tumbling down and their P/E must be causing some sleepless nights somewhere.
Trouble is, it’s in no one’s interest with world finances being as they are.
Either way I win. Diversify, folks.