Cramer shares his post-earnings Apple CEO chat, sees big things ahead for Amazon

Published Fri, Jul 29 20221:26 PM EDTUpdated Fri, Jul 29 20223:48 PM EDT

In a special Investing Club video Friday, Jim Cramer broke down his thoughts on Apple (AAPL) and Amazon (AMZN), which both reported solid quarters after the prior session's closing bell. Their stocks also rose sharply on the month's final trading day. Apple We are sticking to our motto of own it, don't trade it. The iPhone maker reported a top- and bottom-line beat in its most recent quarter. While it warned earlier this year of headwinds of $4 billion to $8 billion due to supply constraints, the number was well under that. Cramer spoke to Apple CEO Tim Cook on Wednesday, saying afterwards he was struck by Cook's hope to both build and streamline its financial services. "You begin to think, well, let's say you take all the different revenue streams and you bundle them including Apple TV+, and then you add banking. And it was very interesting because at that very moment, Tim Cook said 'Yes, that is where we want to be,'" Cramer said. The tech giant has the Apple Card (credit card) and the Apple Pay digital wallet as well as its announced Apple Pay Later — the company's foray into buy now, pay later services. Powered by 860 million current paid subscriptions, Apple's Services business was the fastest growing segment for the company this quarter. While the company's Achilles heel could be the consumer weakening in the face of a slowing economy, we believe consumers could be willing to splurge on iPhones, due to the large amount of time people tend to spend on their phones every day. Overall, we are satisfied with Apple's performance this quarter. Amazon We believe Amazon had an exceptional quarter that reaffirmed our faith in the company's ability to perform. Amazon reported second-quarter revenue that beat Wall Street expectations and issued a rosy guidance. The company's cloud segment saw strong growth that beat estimates, while ad revenue also gained. "Amazon is an extraordinary stock that I think could actually go back to its all-time highs, believe it or not, if [CEO] Andrew Jassy is able to deliver on the cost cuts," Cramer said. Even with Friday's 11% gain to nearly $136 per share, Amazon was still nearly 40% away from its all-time high of $188.65 back in July 2021. Cramer also believes the company's advertising business will roar higher as consumer packaged foods companies tighten their advertising avenues. The e-commerce giant also shrank its workforce by 99,000 people to 1.52 million workers as of the end of the quarter. The company almost doubled its headcount during the pandemic. Cramer said Amazon's downsizing is not only a bullish sign for the company but also for the economy. "Let's not forget, you do not get wage inflation by firing 100,000 people," he said. "If they go back to a more rational workforce, then I think you're going to see the unemployment number go up, not down." "Yes, Amazon is that important," he concluded. (Jim Cramer's Charitable Trust is long AAPL and AMZN. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.