hold the stock. >> tomorrow, gdp and bank of japan. look at the research notes from the overnight markets. everybody is laser focused on what happens so we'll see and all of these earnings, too, for the market to digest. mike and stephanie. thanks so much for joining us on "closing bell" today, and then we have politics, too. stay tuned. we'll be covering hillary clinton's acceptance speech tonight, 10:00 p.m. eastern right here hon cnbc. "fast money" starts now. >> yeah, please, step right into the ring because we've got a full-fledged earnings side right now. earnings from amon, google, kind of like apollo creed beat on rocky in rocky i. can you see josh "tough guy "lipton and jon "don't mess with me" fortt and julia boorstin. welcome to "fast money," everybody. i'm brian sullivan. can you tell that melissa is out all this week.

our full trader lineup including bob peck who will do double duty tonight on alphabet and amazon. he is on, literally, the red phone which as i went over there is actually connected to nothing. hi, everybody. good to see you. >> welcome. >> you're not supposed to give that away. >> everyone knows that. we have the smartest audience in television. >> look at these after-hour moves. amazon.com up 2% on results and alphabet up more than 5% on its results beating on almost pretty much every single metric. here's the question. is it still too late to get into these names given the recent runs that very have had and on a broader picture what do they mean for the overall market rall? got some pretty heavy market stats coming up in a bit. dan nathan, thoughts on just this? >> amazon and google are two very different stories and google had a disappointing quarter. if q1 the stock has been in the penalty box since, growth had a reasonable price here. i don't think you can really say that about amazon even though they did put up a record profit

this quarter and people will think about cooingle and say how do we get it back to the prior highs which at this point is not too far away. on amazon the question that you ask is is it too late to get in? you could have asked me that three months ago, right, steve and i would have said yet. this one i can't get my arms around. run thing i'll say, as far as the aws is concerned, still 10% of their sales and still the most profitable part of their business and growth is decelerating and we know that competition is coming. >> or you could almost say it is the profitable part of their business. >> correct. >> because, amazon -- >> you want to show a profit? >> amazon as you know, steve, has always been a ref new growth story. profits will come tomorrow. we've been saying that for ten years and now they have a division that's growing and has real profit. >> right, but always a case when they want to turn the spigot on they can show the profits so they are investing like mad dogs in their business. so whenever jeff bezos wants to cast the shorts on their heels that's what he does.

he shows a profit. >> you think bezos cares about the stock? >> he cares about the stock price and every other ceo will tell you they don't care. they definitely care, but this is more about today and the last couple of days rotation. out of dividend and into tech. we've seen the headlines. m & a, one after the other, this is more about rotation. this stock is about a quarter by quarter basis. >> yeah. i was going to say. amazon to me, i don't think this is rotation into. >> first of all, a couple names. maybe you can make that call in terms of big-cap tech. dan pointed how google has had a target on its back since the stock broke out and to me what's sensational about this quarter is they have 41% free cash flow of growth year over year. a company that people were vilifying for spending too much. the fact that they have gone from 92 million to 858 million in earnings year over year is extraordinary, and it shows that these guys can just flip a switch. hearing bezos saying we're moving heavily into india and a

quarter like, this one of the things coming across the tape, wow. are these guys finally going to be executing like this globally? back to your question though, brian. i mean, it's all about what your mandate is. to me google is a much more investable stock at this level. there's an extraordinary amount in the price. steve and i have wrestled with this whole term. i think a lot is priced in amazon. i've been saying that for six months. >> first of all, steve. an amazing call in amazon. talked about the stock since it was $190 a share. long before i was on the show, look at google, let's talk about the stocks right now. you've got a crowded, crowded long in amazon, and i'm not saying it's for the wrong reasons but you've got every institution in the world that is long the stock and happy with it. they will continue to ride this out until something changes. google, however, very different story. hedge funds say it's been a consensus sure. people have been very concerned about the back half. year. that's been the drag on the stock. they were concerned they were going to put up bad numbers. again, that would predicate what would happen later this year. they don't give guidance. our experts are saying second

half of the year is going to be pretty solid which goes against the grain. they put up a good quarter now. the shorts will be covering. they will cover in a massive way and i think it continues. relative value, you own google. >> i want to get back to amazon because the point i was trying to make about amazon web services revenue, 2.9 billion, consensus 2.83 billion. so it's growing. the knock on amazon, dan, has always been, well, my gosh, you know, it's going to lose money and everything and they will make it up in volume. now they have got this real division, real profits, yes, only 10%, but still -- that's still 1 in 10 dollars that's coming in. do we have to analyze amazon differently now than even one year ago? is it a fundamentally different company? >> well, i think it's confusing. the headline numbers are going to atraffic. the revenue numbers do so much of retail. when you think about what's going on. >> 30.4 billion. think about this. really important. 10% of those sales were aws.

a company with a greater market cap than vyacheslav kostikov, walmart and target combined. when you look at this stock, right at all-time highs, you're basically only valuing it on how much and how fast what the margins are in aws and what i'm comfortable about, brian, very fess click we know that google, were know that ibm and we know that microsoft as far as the public cloud is concerned are going after those margins, and the only way to compete for market share in a growing pie like this is to do so on price. >> there's no way anybody is going to catch up with amazon here unless amazon screws it up, so that's -- that's the call. amazon stumbles and falls. there's no way -- >> i think dan's point is you're talking about a commodity product. >> the point is -- >> the ability for anybody to catch up. i meaning thinking about who is the second largest sort of competitor, full. >> microsoft soft. >> and they are $2 billion

versus $10 billion. >> i think the problem though, to brian's point, the problem is when they want to show profitability, they have the ability to paul lever. >> right. >> and spook -- >> no, wait, wait, wait, wait. >> i'm not bushel on the stock. that break when it broke down in late june, when it broke there, even for a day, to me it's a crack. >> i will say this. we're at nasdaq market site. a lot of us have known each other for a while. i broadcast from this market site the day it opened in 1999, one of the first people, and since that day, 17 years ago, amazon.com has been doing nothing but burning shorts. 17 years -- >> brian -- >> dan, listen, i'm -- >> i'm not defending the can. all i'm saying from a trader's perspective just as somebody who watches it no company i can think of has had less fundamentally going for it but has done nothing but within

small periods of time destroyed short sellers. >> the company was burning cash at one point and investing stupid money in bad ideas. now what are they doing, investing businesses that are growth businesses that every other company wants to figure out a way to get into. you look at consumables, will eat walmart and target's lunch and in the apparel space will become the number one online apparel company by 2017-'18. they are doing the right thing. >> okay, guys. a lot more to do. it's a busy night here. josh lipton has been listening in on some of the calls and has details on alphabet and everything else. josh, what are you looking at? >> reporter: well, brian, easy beats there on the bottom and the top for alphabet, driven in part by mobile surge. the ceo on the call talking about the emphasis on mobile. take a listen. >> the strength of the quarter is about mobile. it's trance formed the way that people consume information and google's products have become a

central and much loved part of the experience. our investment in mobile now underlines everything that we do today, from search in youtube to android and advertising. mobile is the engine that drives up percent and now -- >> reporter: one of the number analysts are calling out here, google website revenues, are 15.4 billion, up about 25% so that's google.com and utube. showing you the strength of that ad business. sully, back for you. >> all right, josh. see you in just a bit. right now let's bring in sun trust bob peck on alphabet, buy rate, 2k4r5r8 50 price target, bob. you're listening in. is there anything that you've heard at all that concerns you, or is it as the numbers seem to imply a very doggone strong quarter? >> strong across the board. everything accelerated from the clicks to google sites, the home-operated properties. network was good and revenues accelerated and did it all on

better margins and incremental margins now are over 40%. their tack, a big part of this, is right in line with what we're talking about. they don't guide and don't forget they also have 80 billion or so of cash in the balance sheet that they will use towards share purchases and being sglisht what do you think has been, bourque the problem with the stock. yes, it looks good after hours. yes. we've had recent strengths and still down about 1% year to date. what do you think has been the problem with alphabet which i still can't call alphabet? >> there are a couple of different things there. one was the second half. year has tougher comps. they will let new products last year and people are looking towards, that the rising tack and more and more people go mobile, not as cheap as desk top and the application economy so a couple of headwinds that they have had but clearly the numbers have blown it away. >> which of these stocks would be the first to hit 1,000 a

share even though it's in the apublicable. >> why don't we do a trillion dollar market cap. that doesn't mean anything to me. >> you being real or hyperbolistic? >> we're talking about a market cap of the company. i get your point. which company will get to the point where they think it's too big to move the needle and too much good news is priced in? google has a long way to go. a number of different products, a more diversified play. not just youtube. they have the entire web birks the entire search business. these are cash cows and seven businesses of $1 billion more and on valuation this is the stock you own and transparency in the company msnbc you know what you've owned. >> alphabet/google right now after hours above its record high intraday so there you go. awful fet is still in my mind of a one-trick boney. >> yes. >> what if they can fully monetize android? >> well -- >> i mean, half the world, well

half of neck myoway used the android operating system. >> that's a what if in my opinion. i think of it from the standpoint of the near term -- if i'm an investor and look at the stock, what do i need to sgho buy the stock over amazon? absolutely buy it from a relative value perspective over amazon. >> if you had to pick one. >> long term, i mean, again, there's a lot of moving parts from an android perspective in the long-term growth of the story, but i do believe this is a name want to own over amazon for the short term. >> how about over facebook. >> facebook up 20% year to date and when you look at google. google has struggled to be positive and everyone loves google and growth at a reasonable price but when you look at facebook, i think you get to weave and thread that needle here a little bit tweebt two other choices. >> bob has the 850 target, but he's i don't want to say bearish. the average target is 49 analyst coverage awful better, unbelievable. the average target price is $905 of a share so some of those are going to be high. i mean, wall street is very

bullish now. doesn't mean they will be right. >> i bet tomorrow that average is up to 950. you think we'll see upgrades in price target change and everything like this? >> yes. >> a lot more to do, guys, on alphabet and amazon and don't forget about oil. crude oil plunging hitting a multi-monthly low today, very close to breaking a critical level. is that a concern though for the stock rally? plus, we heard the latest from google's ceo. we'll bring you headlines from amazon's call. later the one sector that could hold the key as to whether the market is about to break out. the whole new high again. a look at what to do and what that is when "fast money" returns.

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all right. welcome back. let's get back to our big move of the day. not stocks that we talked about. this is the u.s. oil fund. uso, falling begin as oil falls again. in fact, crude oil getting back to the $40 a barrel mark. just off it. now down 20% from its recent highs. guys, in other words, crude oil from its recent high is effectively once again in a bear market. >> well, i'll tell you what, it certainly has reason

fundamentally to say hey we're trapped in a range. this is the bomb of the range and i think this is the way to buy oil. i look at the fundamentals and i look at the capacity and production that's come off line. i know the numbers we've got and know we have a glass cut and this is something that's slowly working itself. how did we get to a place where people coming on now are saying we're starting to get some balance as we get into the first quarter of 2017. that's not an oil market >> we're up 90 drilling riggs over the past 45 days. >> for me $40 is technically the place where you let it prove itself. so if tim is right then we bounce from 40, probably don't bounce high from 45. because have you nigeria coming back online and libya coming back online. >> the dollar is a huge aspect of the oil. >> and it is and when we get bank of japan, maybe the dollar will be in retreat a little bit so we don't know what stimulus is but we get caught in the weeds there. have you to wait on oil until it proves itself around the $40 mark. if it bounces from 40 you can be

a buyer of oil on the integrateds but the integrated names are the ones -- the oil space, that's what people had switching out before. >> the question is when you think about investors at home, buying energy stocks now. you look at the disconnect that the commodities had with a lot of equities. it's completely disconnected. the commodities sold off a lot more than the equities have sold off so the question is do you jump in and bite equities right now? is it the right time to jump in and buy the stocks? i say no. i think there's a lot more downside risk. >> after the close, i looked at my jean and one thing that made me, to your point, not optimistic but marathon, conoco phillips and hess traded higher. do you care about that? >>, i think it's important but the question, is and i don't know what's the dividend that goes along with those names. dividend plays because if they, i can understand why. >> some are less than they were. >> i think that's a good point. in the case of merck you'll get a dividend cut when they

announce last year, when they have their agm. they just announced. a lot of oil companies have given you a baseline from which to look at their balance sheets, too, and i think this is the reason why you're asking the question, brian. what's happened to credit as oil has pulled down. if you look at the correlation between the hyg which is the high yield index, etf against oil, it's not given any ground and the question is when i'm listening to steel companies and iron ore companies and guys in the commodity space, tech resources, u.s. steel yesterday, their balance sheets are better. lengthening in maturities and from a credit perspective, that's a reason why the equities are working. >> i think the whole premise in buying these equities, i understand the fact that most of these names completely on their own, but when you think about it, we had a move in crude and we're retreating right back on the gas line, you know, concerns, but i think the real issue here is when you look at it and say is it time to jump in and be there for the short term or the long term? i can't imagine demand is going to pick up enough because

demand -- >> the energy space. when crude hits 40, that's when it starts to take the s&p with it so if it does not stabilize. >> so you think -- it's been not correlated recently but you think it will begin to be again if we fall more? >> demand was going to pick up demands, we saw it in the gas line business is not picking up, so, therefore, that's the leg of the stool that's sort of not in place right now. >> demand was never the issue. demand was never the issue. >> demand was the back end if we see a moving crude. >> look at balance shoot. i'm speaking generally to permian but the scoop stack, oklahoma platform, whatever, scoop stack in, oklahoma it's some. lowest cost production in america that does not get a lot of attention. all right. as we head to break, a look at two big stories of the night. amazon hitting new all-time highs in the post market and alphabet hitting a new high. also, in the aftermarket but the stories are not written just

yet. there are new headlines coming out of the conference calls that we're going to have for you. i'm brian sullivan. you're watching "fast money." here what else is ahead. >> far away in a galaxy called steal a war rages between oracle and sales force for supremacy over the cloud, and we'll tell you what those companies might buy next. plus, a major bank of japan meeting could very well be the most important thing that happens to your money tomorrow. and we'll explain why when "fast money" returns.

welcome back to "fast money." i'm julia boorstin in san francisco with the latests from c cbs' earnings calls on the heels of the company beating expectations on both the top and bottom loan. ceo les moonves buhlish about what's ahead saying they expect a great year for tv advertising which will benefit from higher up-front ad prices as well as political ads. >> we are still in the early stages of what we are very confident will be a record presidential election year. second quarter political sales came in higher than expected thanks in part to primary spending in california and right now we're seeing big activity in many of our major market o & os. as always spending will peak in the fourth quarter. >> moonves is very much traditional on traditional company saying they are benefitting from the fact that digitaled ads work better with

broadcast ads and it's hard to duplicate the reach of old-fashioned tv and moonves also revealed the company has 2 million subscribers between cbs all access and its showtime app and even took a potshot at hbo which reported 800,000 subscribers back in february and hasn't updated its numbers since then. >> in the comparison to hbo, i would say when you look at our programming, you know, one would say our programming, we have more major hits than they do across the board. therefore, it's not at all surprising to us that we're sort of doing what they are doing and maybe a little bit better. i don't know. >> as for rumors of a possible recombination of viacom in the wake of the sumner redstone drama, moonves says he won't company and the company feels like they are complete and cbs still evaluates every m & a opportunity. brian? >> julia, thank you very much. let's trade this media

landscape, guys. by the way. when you look at cbs, cable networks, a little weaker than expected and advertising up, you know, operating income up 25% year over year and you have the "star trek" series coming out in the back half of the year which moonves is very, very bullish alone. >> that alone on "star wars" viewing will keep that way over the top. >> this is a really interesting setup here because we know the entire space has acted pretty poorly. will talk about disney a lot in the next week as we talk about their earnings. this is very cheap stock and then the -- >> why do you call it cheap? >> trade you 13 times growing earnings and 22%. almost 10% next year. there's not too many in the space that have that sort of growth, trading below a market multiple and you throw in the potential for a recombination with viacom and have you corporate action. this thing could break out. i think you probably want to buy it closer to like 50ish. it's been range bound there at the high end of the range. >> this company is also more insulated from some. things bothering some of their competitors. they have got the base and talked about the execution and even for cbs but the over the

top and high-margin stuff, this is what they are talking about and as julia said they are ahead of scale. i like it. >> by the way, alphabet, amazon and cbs, cbs has the most upside versus its average analyst price target, about 14% is where they are. doesn't mean anything but les moonves touched on something there. >> it's going to be a record political ad season, and i think anyone who has watched thus far. >> just for the viewers, got to note ott, here it over the top. apple tv or roque, you see the apps, whatever you want to call them. sort of bypassing the cable system. amazon investing more. they just said that. netflix down half a percent. they might be related. up next, the s & b hovering near all-time highs. earnings blowing past estimates, but are stocks beginning to look a little too price? dom chu has a special report. plus, big oil on deck to report tomorrow with both exxon and chevron out in one day before the bell.

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all right. welcome back to "fast money" on this huge night of earnings. investors so far love what they say from both google parent company alphabet and amazon.com. both stocks jumping after hours. google is up 7% and amazon is up 3.5%. sun trust's bob peck is pulling double duty for you tonight. still on the alphabet call as it starts to wrap up here. he just jumped also on amazon's call which is also kicking off. more on his views and those headlines a bit later on in the hour. but first let's get now to the overall market. the s&p closing yet another day within a skosh of its all-time high. are stocks getting tooey at these levels? dom chu is at headquarters breaking it all down. >> reporter: brian, at heart of earnings season with so many potential for market moves

stocks would be more volatile than they have been. over the past 11 trading days, traded in a 1% range on the s&p 500. the vix is still below 13. that's neither lows of the year. still a pretty raging debate about whether the market is really overvalued. so according to fact set, over the past 10 years the s&p has traded at an average 16 times trailing earnings. today that number is closer to 20 times. the utility sector, trading at over 23 times earnings while its ten-year average is closer to 15 times, and consumer staples trading at 20 times earnings with the average closer to 16. even tech stocks. they are 21 times earnings versus 17 times on an average basis over ten years. energy, of course, ate nominally here, guys, trading at 91 times earnings versus 15 on average and we all know about the decline in oil prices and how the profits are being affected for energy stocks. time frames always matter. ten years is arguably perhaps not intic difficult of the current market but it does take into account the financial crisis so there's that.

price to earnings also isn't the only or even primary way to value some of these sectors. still though, earlier this week the treasury office's office of financial research offered its mid year valuations as being a concern. they are looking at something called the cape rape or the cyclically adusted price to earnings ratio. valuations, brian, continue to be on the mind of investors as stocks struggle to find direction near record highs like we are right now, guys. back over to you. >> as always, great stuff. thanks very much. so, could these relatively high valuations signal trouble for stocks and your money? ubs executive director for u.s. executive and strategy you'llian emanuel. went through fact sets before the market closed and want to read you a couple of facts that i put out on instagram. s&p 500 up 7% over the past month, 180 s&p 500 stocks run

more than 10% this month. 206 those are up 20% this month, and there are 130 zap 500 companies with trailing pes now more than 30. it seems like there's real reason to worry about valuation. yes or no? >> maybe. it's not that simple. >> that's not an option. >> sorry. we look at the last ten years. there's no doubt that we are towards the highs in terms of valuation. the point being though that if you look at past full market peaks we are still about a one turn below so that's really 2,400 almost in the s&p 500, but for us it's more a question of sectors. where are the vulnerabilities right now. >> here's my question to you, julian. where are all the vulnerabilities right now? >> there we go. >> great question, by the way. >> thanks. >> we think they are in the defensives, okay, as -- as dom just pointed out there. utilities trading, you know, far above all-time highs, and when

you think about a technology stock, a large-cap technology stock that has perhaps 15% to 20% of its market cap in cash and is chug along and looks to grow well over 2% in 2017 versus a utility stock whose earnings are suspect going forward -- >> well, not u.s. the lights are going to come on. you're just not getting any growth. >> that's correct. this is where the analyst community can't judge it properly. you're judging on a history that didn't have what we're looking at now. the fed and every other central bank has created an environment of multiple expansion so when you look at 23 times versus 15 times, it seems atrociously overpriced but we've never seen this environment before. >> which is why with the ten-year yield around 1.5%, it is not expensive, and -- and what we're looking for is what

you typically see towards the end of bull markets. the more cyclical sectors leading and public participate being. we have climbed the wall of worry. clearly for months now, it's still there which means higher thoughts for us event police. >> i'm sorry. >> totally agree with you. i believe a lot of these, you know, yielding names, which we saw come off and talked about in the show way overpriced in my opinion. talk to me about nrmgt i look at energy and see a pullback in the actual commodity. do you look at the energy sectors be overvalued, undervalued, a good play here in the near term? >> the energy sector has suffered from all the money that was accumulated at the end of '14 and '15 waiting to buy distressed assets and the fact is because the money was there in the first place the assets buy and large didn't become distressed and as we tucked about earlier the credit markets are telling you the distress is less so basically you're going to stay overvalued. look, with ail coming in here, we are not in a rush to own these names. >> all right. julian emanuel, thank you very

much. be concerned about some. more defensive sectors and not in a rush to own energy. appreciate that. after hours, big movers up but not every stock is winning. let's go to jane wells with some. woes perhapsch wynn resorts. jane? >> reporter: great call with steve wifnlt never disappoints. talked about interesting insights and the future of gaming and also election. for the company, macaw is great but analysts are disappointed with the number of tables the new wib palace will get from the government. they will probably have to move some over from another property. steve wynn says the company has been analyzing tables and found only a third of v.i.p. tables are responsible for all the profits. overall all the tables are there, quote, the profits stink so you don't need all the tafnlts you don't need to comp all the rooms. you don't need all that champagne. fewer tables you get more bang for your buck and then he was asked about the election. now, we know he doesn't like the obama administration. he didn't endorse a candidate but he said both of them are missing the real approximate the deficit, that we are, quote,

printing money. hurting working people. he called it a destructive fiscal policy and said the new president whoever he or she is and the congress need to fix that. listen. >> in the history of the western world inflating your way out of this kind of a problem taken to its extreme, to use the weimar republic as an example, people went grocery shopping with wheelbarrows versus full of currenty. >> he said count me as one of the old white guys that's from us trade. okay. back to gaming. a couple more points. he said the future, at fleet macaw, is what they call premium mass which is the high end of the mass market, not v.i.p., people spending 2 or 3 grand at a time. overall in gaming he said expect more of the follow. stadium-style table games where 150 people can play at a lower entry point with only four dealers. also, one last thing and note, brian. tuesday they expect mass mass to give them their final environmental permit and

wednesday they will really get to work on the new everett facility which is costing about $2 billion. back to you. >> 150 people playing a game with just four dealers. that sounds not fun. jane wells. >> oh, no, in a stadium. a whole new play of playing, brian. >> as long as can you reach over. >> jane, thank you very much. interesting concept. let's talk more about the stock guys. wynn, the worst performer i believe last year or at least one of in the s&p 500. has come back this year. down 3% right now. anybody got a take on wynn? >> i was actually short wynn through the last psych. out of that short and part of that for me was we had come too far too fast. the valuation really hadn't teen a turn in macaw and now seen stabilization and waiting to see what it means for these guys and a lot of these gaming stocks to me are optically very cheap, and -- and when 150 people are sglag wh playing. what do you mean by in a? >> i'm not sure that these guys are going to perform at the same

level that they were two years ago, so i don't think you need to rush in here on any of these names. getting political in the space, you know, we've talked on the show about whether he has friends or foes in terms of his competitors in that part of the world, and we're talking about trump. i don't think it really matters but i do think these guys are looking for a world where the consumer is less levered so they can go back to vegas. >> just noticed -- just checked. pretty amazing. wynn resorts was pennies away from where it is from one year ago ago. tanked this year and you 1% and literally almost at the exact same price as it was one year ago like never giving off the bus. end up in the same spot. >> like encino markings like you were just defrost or something like that. that's a pretty -- >> brendan frazer also handsome. >> still asglaed if i must say so myself. >> a major deal in the cloud space. setting off rumors about the street about who might be the next target of another deal.

our traders will give you their top pick right after the break. plus, we're keeping our eyes on shares of amazon. they are hitting all-time highs in the after market. just how big we'll find out more later in the after hours this hour.

and welcome back. you can probably hear that. >> brian, this is note the first time we've had a fire alarm hon "fast money," and it's exciting. tend to talk our way through it because this is "fast money." >> i like it. you know, if you've got to sit here and add lib around a fire drill let's do it. >> that sounds like almost coming from out of space. >> like a galaxy far, far away from here, otherwise known as silicon valley. oracle agreed to buy net suisse and biggest in oracle history and another chapter in the cloud wars. thus the theme, so what other company or companies, might oracle or somebody else snap? linkedin, sales first, cmgi, and for the latest let's get out to josh lipton. josh? >> reporter: sully, in the cloud wars oracle just fired a big

shot. i love that graphic, by the way, that was the highlight. the company saying this deal willed a to its earnings after the acquisition closes. oracle, of course, fighting hard to win in the cloud against big-time rivals like mark benioff and that team at sales force, and in its most recent quarter oracle is saying total cloud revenues jumped 50% to some 860 million. for investors the question is who is next to get bought. now one name that could immediately come to mind is work day. that's the most natural comp to netsuite and workday won't get sold any time soon barring a really rich offer. the business is really performing well and executives, i do believe they are starting to capitalize on what they see as a big market opportunity. two names that an lives do see as potential m & a targets over the next 12 to 18 months, michael turrets with enterprise

and he says servicenow is one of them. high-growth, expanding margin business. servicenow saying they don't comment on speculation. other software names that could be m & a targets according to analysts, horton works which is also high growth and working in that sweet spot of big data analytics. the company expects to be cash flow break even in '24. one potential challenge is some buyers might not be as inquisitive in the near term given the recent buying sprees we're seeing. microsoft shelling out 26 billion to buy linked in. still m & a remains a dominant theme out here in software as evident by today's big oracle headline. sully, back to you. >> thanks very much, josh. dan, let's trade the cloud which is pretty much everything is in the cloud. >> and i think, listen, have you to think about microsoft and linkedin. we know mark benioff and crm wanted to buy these guys. it was a $27 billion and then

that takes you down to work day and servicenow, two names josh talked about. the netsuite deal is about ten times seals. these two stocks are already trading at ten times sales so if the management and the boards would sell, it would be a significant premium from here and then we get into a period where, you know, they are basically paying mid-teens times sales for assets that only have about a billion, billion and a half in sales and then you say to yourself how does that really move the needle in a company with 50 billion or $150 billion in sales. >> a new segment. i'm bringing to "fast money," a new segment called the alarm segment and whoever is talking when the alarm goes off gets a hug. there you go. >> let me talk here. >> come here, brian. welcome to the first -- >> got the heisman. >> there you go. >> on a bigger note. >> sorry, folks.

>> things happen and it's live television. >> what i noticed from this deal, brian, that s.a.p. is along on this strategy, probably a head start two to four years on this strategy that oracle is trying to catch up with. >> on a -- >> having said that, there are other companies that you can buy, but i think longer term, s.a.p. is going to reept benefits. >> on a serious note, talked about if on "power lunch." we say the cloud, i refer to the cloud as like saying a bank stock. there's goldman sachs and then there's your local bank and when we say the cloud you've got to be careful, the deal, netsuite, look at tyler technologies and demandware and service now which is mentioned in the work day. they do very different things. just because somebody says they are a cloud space. >> basically asks for business and now you have all this cloud xugt, all this processing power that's not in your own data center, right, you're outsourcing that and then there's a business and need back office software like netsuite

and customer management software, all basically apps that you're putting on your business platform. >> i'm just saying know the space you're buying. >> totally. >> i think the biggest thing to think about here, think about the legacy guys. they are required to throw off cash. they want profit. >> of course the investors want it and they want the growth and the growth isn't there for the legacy guys. need to bolt if on. >> we'll go to a quick break and let the fire alarm play it on. >> chevron and exxon are on deck for earnings tomorrow and how they are expected to move coming up.

welcome become to "fast money." exxon mobile and chevron expected to announce their earnings ahead of the opening bell tomorrow morning. dan nathan what, did we be pect? >> the options market sim playing a 1.5% move from exxon mobile. that's in either direction and for chevron it's looking for a 2% move. stocks 1.5% to 2% on average for both of these names for a lot of you who trade the xle, they make up 30% of the weight of the etf. that's really important to focus on if that's your vehicle for

trading crude. here's the chart of crude over the last two years. we were just talking about it before. this doesn't look like much, but we said it was down 20%. no one -- i don't think it's that important to say we're in a bear market in crude oil but if you care about technicals we're kind of getting to a level here. this is the breakout level and we reversed it. i think if crude oil has a three handle it starts to accelerate to the downside and being used as a proxy may be the thing we start to see beginning in the back half of 2016. real quickly, here's the two-year chart of exxon mobile here. it got up to about 93, 94 bucks. that was a level that, you know, found some support last year, so maybe we see consolidation at lower lows and this is chevron, been in a pretty tight range. i suspect both of these stocks stay in those ranges after the report. >> all right, dan. thank you very much. for more options option check out the full show at 5:30 p.m. eastern time tomorrow night. still ahead, a final look at alphab alphabet. you know it as cooingle as it's surging after hours and up more

than 7% and we'll hear more from the execs at amazon about what drove their record quarter and that stock is also higher and all the traders will tell you what they are watching tomorrow up on "fast money." next. hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. onlyt td ameritrade. but the best place to start is in the forest. kubo: i spy something beginning with..."s" beetle: snow. kubo: no. beetle: snow covered trees. monkey: nothing to do with snow. narrator: head outside to discover incredible animals

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all right. welcome back to "fast money." 56 minutes after the hour. amazon hitting record highs after hours. let's go right back to jon fort who has been following the conference call. >> first a note on cost. amazon is opening up 18 fulfillment centers in q3. that will affect profits, three times as many as they did in q3 and also talked about prime day. take a listen. >> record day for amazon devices. it was a great day for small businesses and sellers. saw great year-over-year improvement and more importantly a great day for customers. globally they saved over double what they had saved in prime day 2015. >> all that saving cost money. amazon will spend it in q3 and still projecting a range of operating profit for q3.

brian? >> jon fortt on the amazon call. trade it one last time on the desk. a lot of stuff in there. what are we talking about? >> talking about costs, this company, believe it or not, gets the benefit of the doubt in terms what have they have done in free cash flow. i'm not running by the stock but when i hear, that that doesn't scare me on cost side. >> 100% agree. they get a pass on that. going forward until they screw up and i don't think they will do it. buyer of amazon. >> you can take profits in amazon but you can't short it. >> by the way, watch netflix tomorrow. amazon going to double spending in video on the second half of the year so a lot of competition in that space. bob peck has been diligently listening in on the conference call, alphabet and amazon. what's your grade on amazon or alphab alphabet. >> the guidance is a little weak, grade "b." on google, fantastic revenue, great quarter on better profits, investing for the long term. grade "a". >> overall, happy with what you

heard, bob? >> guidance for amazon, spending going forward here, a little bit of a point to note. >> and still have the 850 price target? >> that's correct. >> all right. bob peck, appreciate your patience. going to have a long night as well. final trade around the horn. talk about everything we talked about tonight. dan? >> i think that these guys are spot on about amazon. nothing to panic about. the guidance, it's a real wide range and they will probably giving themselves some reason. don't have to buy it out. the fact it's not up a lot more consolidates and you can give it a shot. >> i'm concerned about energy and we talk about that on the desk. xle is a several. 66.5 is where it went out and $62, i think it's going to see that before it goes up. >> exxon and chevron tomorrow morning. going to be huge. >> we'll see how that prices in, but i'll tell you. what i do believe that you're going to get an opportunity to sell these xles and make money. >> it will be interesting to see the way the stocks, facebook and google react tomorrow because you saw -- saw facebook today give back the gains and amazon and going s&l what i meant, see

if they give back some of the gains tomorrow. my final trade, s.a.p. this deal today that we saw, tells me that they are on the right track. >> tim? >> giant mobile, i think this is a move where you see mobile start to give margin back in china. a great div play as well. >> my migt -- mission is simple, to make you money. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. my job, not just to entertain but to educate and teach you. so call me at 1-800-743-cnbc or tweet me @jimcramer. this consumer, this consumer is driving me