How Wall Street’s Perception of Apple, Amazon Varies Greatly
"Two great companies. Two different standards: one totally rigorous and one not rigorous enough," Jim Cramer said Friday. "I'm talking about Apple versus Amazon and the way Wall Street perceives the two."
Both technology companies reported earnings after Thursday's closing bell to varied reactions.
(Read More: Amazon vs. Apple: Henry Blodget's Pick.)
Apple's outlook for the holiday season fell short of forecasts and iPad sales in the third quarter also disappointed. Meanwhile, at least three brokerages cut their price target on the stock. In turn, its stock struggled throughout much of Friday's session.
(Read More: Apple Deserves $1,100 Price Tag: Pro.)
"Apple reported a number that was extraordinary by any means, except by the means of Wall Street where it was considered horribly disappointing," Cramer said, adding he heard several undercurrents on its earnings conference call, including the following.
- Apple has too many products with the wrong price points, which aren't selling well.
- Apple also doesn't have enough of its products, so it can't meet demand.
- There is a tablet glut. The introduction of its mini iPad, which some considered overpriced, doesn't help.
- The iPhone 5 pales in comparison to Samsung's smartphone offerings.
- Apple has $120 billion in cash, but doesn't know what to do with it.
- Finally, Apple CEO Tim Cook cannot follow-up the ingenuity of late Apple founder Steve Jobs.
"Suffice it to say that these analysts think that Apple's pretty much finished and the stock's 11 multiple on next year's earnings doesn't matter because Apple's about to report its first down quarter in Q4 with both sales light and expenses the wrong way," Cramer complained. "They think it's a lay-up short because we now have enough detail to know that the company's washed up."
(Read More: Forget Earnings, Apple Still a Buy: Pro.)
Meanwhile, Cramer said Amazon.com basically "told you nothing" on its conference call. It reported its first quarterly net loss in more than five years. The retailer was affected by the economic slowdown in Europe. At least five brokerages cut their price target on the company. Amazingly, though, its stock fell briefly overnight, only to rally throughout Friday's session and close sharply higher.
So while Apple gave investors a detail-orientated call, Cramer said apparently Amazon "doesn't have to answer to anyone about how it's spending or even what it's doing."
"To me it's nuts. It should be totally the other way around," Cramer said. "But it doesn't matter. The judgment's been rendered and Apple falls short while Amazon's better than expected. So it goes, in this, the toughest earnings season since the crash of 2008 to 2009, when the worst man wins."
When this story was published, Cramer's charitable trust owned Apple
—CNBC.com contributed to this report