target or eliminating it all together >> ge is the biggest drag on s&p 500 earnings 50% drop last year, they booked the appliance business sale, so we'll look to that one in the morning. meantime, you feel better! i promised to. we'll see you tomorrow that does it for "closing bell." "fast money" begins now. "fast money" starts right now. live from the nasdaq market side overlooking times square i'm melissa lee. your traders on the desk are -- tonight on fast, the commodities king, dennis gartman, is here with the one chart he says you need to see to make money in this market. plus, the s&p 500 hovering at record highs, but stocks are in bear market territory. the names and which ones the traders are buying when we go bargain hunting and check out shares of microsoft. jumping to a fresh all time high in the after hours session. we've got full team coverage

josh is back at headquarters tracking the call from there but first, the big story of the day. after nine years in prison, the parole board voting today that o.j. simpson will be released in october. just kidding just kidding here's the real big story for us today. it's amazon's world and we're just living in it. the e commerce giant making a deal can sea rrrs to sell alexa appliances in a blink of an eye, the deal wiping out $12 billion in market cap. home depot, whirlpool, best buy all sinking about 4%, while lowe's was down about 6% istargets? >> i thought home depot was one. we've had this conversation. i said it's amazon proof until today, i thought they were and quite frankly, when they

report, i think they'll prove to be somewhat amazon proof, but obviously, it didn't happen today. one of f the other things we said mastercard and visa, i know steve talked about this, but these are two names that have been steadfast not so much amazon proof, but something that sort of goes hand in hand. symbiotic relationship i like that. >> beneficial. opposed to air sittic relationship and now, to answer your final question, what space now is in jeopardy of being amazoned pretty much health care is b probably in the cross hairs, so i don't know wh wr it's going to manifest, but maybe the you know, karen's word, the rite aid's of the world >> who knows it reminds me back like 20 years ago when a.m.son was this retarial they would go into different categories and you'd see market cap come off it's a smart move. do they really care about having sears appliances

this voice thing, they have a big lead on it and can continue to do deals like this. would i be selling home depot down 4, 5% base d off this not marley, but it's important to think about all to the different areas they're going to disrupt. this is a very different deal than their acquisition of whole foods. just goes to show you these guys are not going to stop anywhere sears has 40% market share 20%. now, it's 18%. so, that, i'd be a buyer on the dips home depot, low, buys. that's big that's the big angle on us if you're going to buy a ken more appliance, you would not have gone to home depot any way. >> maybe, i'm not sure how many people when they buy an

appliance are set on i only want a kenmore. some are loyal some maybe shop around, it's a question of price. what i'm not sure of is how much does this expect outside of appliances is that customer no longer going to walk in the door at home depot and buy all the other stuff they were going to buy that amazon will be selling. i wouldn't be surprise d who's going to buy an appliance online on nat gas >> you might have had said the

same thing, who would buy a mattress online. even if it's just psychology of putting ab appliance, didn't they keep talk about adding the geek squad they're going with a barbell strategy they recognize the fact there's going to need to be a where i cans and mortal. if you don't think best buy is going to link up, they're doing a good job online, but this is the trade and this is one reason i think it's important to remember the day before the -- it was trading at 151 there's some business models that amazon, they've really come at hard. this is always in plain sight.

you think about the membership fees costco is is probably going to stay down for a bit. some of these guys, dick's, i know you like dick's that's one where to me, it's kind of amazon proof it could have the opportunity to link up with an e commerce player when some are down and out, they're not down yet the number of of them. it's funny, voice enavailables appliances >> gi, do the laundry. that's why this is all lost on me i don't go to places as a showroom don't you feel obligated >> i do. walt ts into best buy. >> i don't take up the time or the salesperson. i look at the specks i compare. i see if things look the way i want them to look then i google and find the lowest price.

>> sears has been going out of business for a long time jc penney is still there >> also are into appliances now. >> exactly from marvin allison, who's a former home depot guy. going over there, selling it, but takes on no inventory. so it doesn't cost him anything. exactly. >> who would buy these stocks here on the back of this >> home depot is going to report on august 8th. on or about august 8th i think there's going to be an opportunity to buy this stock in earnings lower than we are when i said little bit lower, each quarter for the last four years has been better than the first previous prior quarter and i think the same thing is is is going to hold true here. >> i think there's a loft possibilities to keep a lot of the good stores.

pay doup down the debt and do a deal with an e commerce player a few years aerks we had multiple electronics retailers everyone was calling for the death of best buy. >> karen >> what is the ultimate end game for amazon as they go and disrupt industry after industry i don't know if it's just to deliver the xwoods faster, cheaper, maybe, or is it to one day turn up the pricing. jeff bezos, i doubt it's about money at this point. how much money do you need >> would you have asked that same question of a walmart or

costco they sell lots of different things they sell lock tronic, home furnishings, groceries >> their game plan was to deliver value to the customer. from say that's amazon's game plan what does that mean for all of the customers? extra money. they want to take them to 5,000, 10,000 if the margins are thin, it doesn't it doesn't matter. >> it's been a tough year for rival, but could some stocks be setting up for a comeback? hey todd >> let's take a look at amazon the xrt. retail etf amazon is is the retail killer so as we can see, both markets dropped here in 2016, but at this point, the relationship

starts to diverge. you see amazon move up as retail is moving down so the more they're putting the pressure on retail, we are seeing amazon rally. how far can they go? let's go to the technicals and do a nice carter worth parallel channel here we've connected the lows here all the way back from january 2016 and what you want to do is extend that line up to develop a topside resistant level. we have room to go here. >> kroger, the acquisition of whole foods and other food places here. we're looking at the same here support doesn't come here in

kroger until about 14 bucks. what i'll do is is draw your attention to these prior declines this guy here is about 68% this guy was about 40% you kind of average those out. one more stock here, macy's. we're going to go to the trace that half back level you look at the rally in macy's. >> all right, todd, thank you. todd gordon, trading analysis.com deny dan, does that concern you?

>> i think that's interesting to me you don't want to get in a situation where you're buying a stock for fundamental reasons. then end up averaging down which would be about 100ers. 15, 20 billion, now, you have $7 billion. 25 billion in sales. i think it probably happens in 2017 >> when you think about macy's, when you look at the real estate, they talked about real estate, they don't want to make it, they're just what, 21 billion in real estate >> because depending on how what do what's around a flag ship store, around $4 billion. i think there is a lot to do here >> all right coming up u, even with stocks at record highs, nearly 81 names in the s&p are in bear market territory and the traders will tell you the names they're calling big bargains

plus, snap chat sinking, but it's not stopping the ceo from enjoying his new fortune could it mean more trouble ahead for the company? check out shares of visa we'll bring you the details next much more "fast money" still ahead. when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business,

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shares of visa hitting a high today that conference call is underway diedra is in san francisco with the latest >> hey, melissa. that's right visa seems to be doing all the right things it's already surged more than 25% this year. that makes it one of the best performing dow come poebts they continue to see solid growth in processed transactions the bigger picture is that it is capitalizing on dinlgization of payments it's moving past on the call, executives talking about the opportunity to displace cash and checks the company is trying to expand its reach into europe. rekrebtly expanding partnership with paypal to offer debit cards there. here at home, the quarter was helped by a strengthening economy.

u.s. consumer spending has been on the rise and that's helped boost payment volumes here visa is expecting a solid second half raising its full year and a possible amazon risk to visa, saying the acquisition of whole foods and its new payment product offerings have brought risks back into focus, but thaebl that competitors will find it more cost effective to leverage systems like visa's >> thank you very much we should note that a lot of the credit card issuers like capital one moving higher on the back f these earnings as well and look at mastercard, that's moving higher as well in the payment place. >> so, visa and mastercard, it's at an all time high. the only one that's not is american express they're both up 25%. visa and mastercard. i believe the consumer is in great shape. i think you have more room to fly there. i'm long square, different side of the business. but i think it's going to be

good for any of these companies. they need exposure to square up 93% year to date. >> unless you're jpmorgan and you want to have a paypal relationship >> why buy the cow >> when you get the milk for free or almost free. >> the payment space is a really exciting place to be capital one looks like that was good, although this is a different bet. capital one, you have credit risk, which is a very different bet than mastercard, which i own. visa, those are very, very similar. we see it everywhere there are stores now that don't take cash in new york city it's so that trend is happening for sure i don't know how it gets in the short-term it's been a phenomenal business. if you want more overseas exposure, visa is the way to go. >> operating margins, 68% that's extraordinary this is story we've talked about i think for as long as we've had this show's been in existence. as long as visa and mast ercard have been publicly traded companies. the stories in tech, negative

side, people shoot on them in valuation. they continue to grow into valuation. they process transactions without the risk, good business to be in >> dan >> yeah, these things are getting frothy here. i think the secular growth story well-known at this point, no matter what you're looking at. paypal was downgraded today. it's up on the year. we know they have peer to peer we know a lot of people are going to be getting into this stuff. obviously, this jpmorgan announcement is fantastic. it's becoming a very competitive landscape. when you consider the valuations, paypal is trading 33 times expected at some point, it's getting expensive, especially in a crowded space when sentiment is off. >> think about the me lineay ma lineals switching over people that never had credit cards before then you add on those that have been on debit cards worrying about having a job, moving out of their parent's basement and now, they

get some credit cards. i think it's an untapped thing >> i'm thinking venmo. >> you don't know how that works atds all >> did it that time -- and what happened with you? >> not really sure >> you went to the atm >> time for a little buzz kill here check out the transports falling 1% today the airlines, they were a big drag on the space. united, southwest, delta, all fell more than a percent the iyt down 3% from its high last friday and if you are a dow theorist, dan, this is not necessarily good news. >> when guy started the business, the dow theory was the way to trade here and you had to be cognizant of this thing two days in a row, you have pretty dramatic underperformance by ual and cax there was some kdisappointment there, but to see this follow through, it's worth keeping an eye on here. as we get keeper into earnings

season, it's really important not to get too fixated on stock like netflix and let's look at more things that are more tied to the economy that sort of stuff to me, i think this sector is right there. so to me, keep an eye on these names, see how some of these old economy stocks continue to respond. i'm not concerned. not delighted. ual and american and delta in the mall united airlines, earnings were disappointing. why the stock was down so much but i think three day rule this will be the third day tomorrow i'll look to buy some if it's down u i think it's overdone. >> grasso. >> i think when we've been nervous about certain aspects of the market some sectors of the market but when you look at the s&p chart, we continue to make new highs, so it doesn't really matter about what horses is taking you over the goal line. it seems like people are are just in equities, so you can do

it fixing them. >> so you can take whatever horse you want at this point, the overall market wants water >> still ahead, check out microsoft hitting an all time high we'll hear from the ceo on what drove the quarter. you're watching "fast money" on b cnbc first in business worldwide. here's what else is coming up on fast >> listen to me carefully. >> dennis gartman says he has the only chart you need to see to make money in this market he'll reveal it, next. plus -- ♪ i've got two tickets to paradise ♪ >> snap shareholders are in anything but paradise. meanwhile, evan speeg l isn't skipping aeat ter bafhis fairy tale wedding much more still ahead. for your heart...

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welcome back it was another record close for the nasdaq here's what's coming up in the second half of the show. microsoft hitting an all time high the stock just took a huge leg higher as a conference call is a few minutes away josh is at cnbc headquarters david is at plasma monitoring the red phone. bringing you the headlines, but first, we start off with the markets because even as the s&p sits up highs, 87 companies are in a bear market down more than 20%, many of those names belong to one sector in particular. dom is breaking it all down. >> a handful of sectors dominate the stocks energy in particular is a big part of the story.

around a quarter of those come from this sector alone, so perhaps no surprise give tn recent negative sentiment around oil prices kind of continues the sector overall is the second worst performer in the s&p the only one worse is telecom so, which stocks are the deepest in bear market territory among the worst performer, drilling companies like transocean it sits 50% below its 52-week high also dominated by oil and gas exploration companies, enp companies. anadarko petroleum chesapeake energy. 42% below. newfield exploration, 48% below and then there's range resources, which is currently around 50% below its 52-week high as well now, the extreme bearishness on the sector could make this earnings season key in terms of investing returns or losses. according to thompson reuters ivis, if all energy earnings

come in as expected, the sector could see growth of 546% over the same time last year. the question is, will that be enough to turn the tide on the negativity it could mean big stock swings for these energy names in and around those earnings days back to you. >> all right, thank you very much all right, you said time and time gagain this is the trade yo want to be in for this reason. >> this is the true laggard in the marketplace. the xle is down 13% or so. >> what concerns you this? >> it concerns me that oil bounced off a huge retracement lev back to 1998 to 2008 i chart it and came up with for me, if we don't stay in thlevel,

it's going to be a driving force. if we stay around $50, that's the sweet spot above 50. that will take out the legs because then oil will fall we stay right here you look like values to you? >> i have haldane golar for a long time. it's a different bet on lng this is one i've been long i don't have much energy i know it will bounce i'll feel bad. b but. >> had to be in all that >> is this a would you rather? >> if you had to be.

what sub sector, what stock. what would you look at >> if you believe that steve's right and oil's going to bottom here and trend $50 you want to be in levered place. anadarko petroleum reports i think on the 24th. that will be a catalyst, obviously. however, that said, exxon mobil now has traded sideways since $80.5. i think exxon will leave the commodity and we're out of the woods. until they get out of this nowhere land, i think it's a no touch. that could be a bad sign according to our next guest. dennis gartman joins us now wh what he says is the most important chart in the market today. >> it's a fascinating dhart can of the rh owe of commodity prices relative to the blod

stock market and it's astonishing how cheap commodities are relative to stocks or how expensive stocks are relative to commodities. we have not seen this ratio since the.come bubble at the end of the last sefshlgry or going back to 1971, '72. it's an extraordinary chart. they're an unbelievably inexpensive. all we talk about now is deflation. if you look at the commodity markets, the grain markets have held their lows well gold has held lows almost a year and a half crude has tried. the base metals have held its lows prices are likely to do better over the course of the next, not the next week, not the next month, maybe not the next quarter, but certainly over the

next several years it may take time, but i think that's the way the trade >> when you use the term, commodity, what portion of that is oil >> it depends. two of the broad indices, one is the gsci, which tends to be b a tad more skewed towards crude oil. probably 35 or 40% there are others that are less skewed toward crude oil, but crude and natural gas are large components of most of those indices. pay attention however to what's going on in the base metals, in the grains that's where i am paying attention to is this a short-term call? >> i think it's going to be difficult for wti to get much ant 50, $52 per barrel because

as long as the con tang ore mains, anything above $50 gives you 52 for the one year and i'm telling you as steve said, i think on balance, crude oil is getting a bounce, but that's going to be minimal. what's really happening is what's going on in grains, in the base metals, in the softs. that's the interesting thing to me >> great to see you. thanks a lot for your time and for that chart dennis gartman of the gartman letter to karen's point in terms of etfs, that's mostly oil. if you're a believer in dennis, you want to be in the agricultural commodities, the met metal, the other side. which may not be reflected in that sort of index >> i don't know what the right way to play that is.

>> right >> so, higher prices going forward out of the curve versus backwa backwardadi t backwardadion. for me, i think you're going to see around 50. not much higher or lower thate sweet spot but equities is still the lower bet. >> if you want to get real commodities, there's a little resurgence in steel stocks, there's clearly, at least there's traction in some of those names, so if you want to be in the space and pete mentioned this, i think the steel names saw some room in the upside the flip side is that stocks are overvalued that's the other part. >> to trade the stock market,

right now, there's a lot of things working part of that conversation we didn't mention is that the u.s. dollar index today had a massive 52 week low. that should be something beneficial to the price of ail oyle and commodities i'm surprised oil is not trading better off that. it's on again, off again so all bets are off. i don't, make believe that i have the answer to that. that is off the table. when it's not predictable as the way it used to be. >> still ahead, microsoft out with earnings, the stock hitting a high following a report and take a look at the spike that started just before the

conference call got underway it's now about five minutes in we're manning the red phone. we'll get his thoughts as well as comment frs the ceo later this hour. plus, snap shares feeling the heat record lows as the ceo soaks up the sun on vacation. the key event next week could put more pressure onhe sck tto we've got the details when "fast money" returns in a doughnut. right away, it was a success. i mean, it really took off. what people don't know is that it all started with points from my chase ink card. i bought the ingredients, utensils, even custom donut cutters. wow! all with 80,000 points. what will you create with your points? learn more about the ink business preferred card.

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to keep our community safe. before you do any project big or small, pg&e will come out and mark your gas and electric lines so you don't hit them when you dig. call 811 before you dig, and make sure that you and your neighbors are safe. 811 is available to any business our or homeownerfe. to make sure that you identify where your utilities are

if you are gonna do any kind of excavation no matter how small or large before you dig, call 811. keep yourself safe. welcome back to "fast money. snap falling again today sitting near all time lows and that's got the ceo feeling the heat, but not in the way you think. page six of "new york post" reporting that the 27-year-old was spotted vacationing in europe but the ke julia has more on that >> those reports of evan on v vacati vacation, come just a week and a half away from a major expiration of a lock up period on snap shares about 85% of snap shares becoming available for sell before the end of august, now, on monday, july 31st, about 400 million share wills become

available according to jpmorgan, which says on august 14th, following snap's quarterly earnings, another 782 million shares from employees will become available with another expiration of a lock up of 20 million shares at the end of august, now, snap shares have been b plumeting as a public company, showed slowing growth and ahead of the lock up, short tell zelling has been on the rise if history is any example, it could get worse before that lock up now, one week prior to the day of their lock up u expirations, facebook, linked in and twitter traded down by 14% on average according to mkm partners. jpmorgan warns there could be still further downside into and after that initial july 31st date, particularly as stepping into shares would likely require taking on second quarter earnings risk, now, earlier today, on cnbc, former twitter ceo said one way for snap to

mitigate those risks as facebook increase gliocokreecreasingly cs is to try to distinguish its service. >> when competing directly against facebook, they can just bring enormous market leverage to bear against you, so you have to look for you know, flanks if you will. into which you can operate and move >> just yesterday, snap launched its first ever twice daily news show that was with cnbc's cousin company, nbc news. we'll have to see if that kind of focus on premium content, premium new se s is snap is goit try. back to you. >> thanks so much. interesting words of advice from the former ceo of twitter. considering twitter didn't follow that adviceitself steve. >> he's learned a lot from that. i think that maybe you see twitter doing well

i think maybe it's doing well because people took a high yates from snap moving into another social media stock you can opine over whether it's a long-term investment strategy or not, but there's certain people that still believe in snap and they believe that facebook is not going to take everything that they do and replicate it and for those people, it looks like you're going get a hell of a discount below the $17 ipo price! those people who don't believe in snap. >> i read one of the first things i read this morning, evan, yachting, a brocation. he's entitleded. when those are the sorts of stories dominating the news on the stock on any particular day. it's really important to think about this lock up most lock ups we saw on very high profile stocks in the last

five years took a long time for this amount of shares to come. so the fact it's so bereaveuaab, who knows what the stock is going to do in the july 31st lock up. but it's going to be like a coiled spring. we know there's 30% interest, so let's give him a break >> i agree i don't own the stock. never likeded the stock, but first of all, he owns all the votes, right so, if hemts to go on vacation, he's going on vacation he deserves it the quarter's over it already happened. the rest is just account iing a filing the q so, that doesn't really matter and you want to sell shares under lock up, you can do that from other places. which is the beauty of the internet i don't being all over him about him being on vacation. >> he's with his wife, right why is this a bro -- >> he's got his crew on a yacht and his wife and crew.

>> it's very 1980s >> his crew is a kai coop. remember that movie in the '80s? >> any way >> but what i do take again um bridge from the other day, i do again. on may 11th when they reported their first quarter as a publicly traded company when the stock was down some 20%, he was awfully glib in the conference call we made mention of that, so i thinkexacerbated i don't know how to spell either one, but i use them both correctly. we talked about this you had somebody on your show a few weeks ago that said they see this as a single digit name. i'm not sure about that. >> let's stick with sthap here and dan is taking a look at what the options market is implying on the heels of the lock up expiration >> i think it's important to remember that this is a stock that has obviously a short history. options have not been trading too lopg take it easy over there. there's a couple of dates here

they like to look at dates we know what's coming here, on july 31st, maybe there's 400 million shares that are going to come off lock up if you look at the options market the money in the straddle for the august 4th weekly option, it's imply iing about a 10% move in either direction. which seems fair the stock is down about 50% from its post ipo highs the other date, august 10th, that's the report, the second report as a public company here. the options market is implied about a 15% move in either direction. listen, obviously, there's no guarantee. as guy said earlier, after that first quarter they reported, the stock was down 21% this is just giving you guide post how options traders are pricing risk in the story. i think it's important to remember as we look at this thing, you know, this has been a one way trade here 30% short interest we know there's a lot coming here that could alleviate things. when it goes one way here, you

could have a quick snap back what am i drawing here >> ghosts. >> this is the logo. seem like the whole world is is fairly -- that this thing is going single digits. i bet you have a relief rally. >> that was excellent board work >> i don't think so. i think broxton worth -- >> draw ghost. it's the snap logo stay with us u here: >> sorry >> any way >> great job >> i thought it was good options action, check out the show tomorrow, 5:30 eastern time still ahead, microsoft hitting a high the conference call is well underway we'll hear from the ce o aerh,ft the break. i'm here at the td ameritrade trader offices. steve, other than making me move stuff, what are you working on?

let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. see options data like never before. with thinkorswim only at td ameritrade.

welcome back for more on what the ceo just said about the quarter, let's get to josh lipton, who is back at headquarters. >> the key number by this report, commercial cloud

organized the rate that hit $1.9 billion. that was up almost 60% take listen. >> i'm proud of the progress, particular ly the strength of or commercial cloud results all up was a tremendous year of customer momentum with cloud, ai and dingital transformation our technology world view of an intelligent cloud and edge is resognating with businesses everywhe everywhere a place for themselves, $20 billion in fiscal 2018 azure, 97% more than 40 countries regionally back to you. >> thank you very much, josh lipton in terms of the cloud leader, now, it's really pretty much on par or exceeded amazon web services, which is a big

milestone for microsoft. >> so, what does this illustrate pete's been on this story. what it illustrates is how quickly they, being microsoft, were able to make this turn and not an insignificant turn for a company of their size and how slow ibm is to make a similar turn, so all this does is reenforce as steve set the short in ibm and the fact they can't get it right and microsoft does ch what's the right valuation, i think given the growth, 98% growth, their cloud growth is similar. you can make a pretty compelling argument this could trade 25 times next year's earnings, which gets you to about an 83, $84 stock. they have a new ceo come in. with a mandate to move toward it is cloud cloud, he was running towards their businesses they weren't moving fast enough. so it's a great quarter.

this stock the has reacted well. it's a company that's made bad decisions in the past. their acquisition of nokia they took almost a $2 billion loss for that. so it wasn't the headline to me. i think you don't chase it but, could you get to 25 times in a world where some of its competitors are trading at a richer multiple? probably let's bring in david garrity david, would you buy the stock here in. >> i think the company looks very attractive. in terms of the expectations for earnings growth going out through '91, we see an acceleration from what had been a 1% decline to probably about 11 to 13% rate for the quarter, the street was e expecting less than 3%, so we're seeing this uptick, the

acceleration towards that expected growth rate forward favors a better multiple if you want to look at cloud computing, they've got more regions covered worldwide than amazon web services and you're seeing that the uptake in terms of commercial customers now from a survey six months ago, 20% of commercial customers said azure would be their first choice, now, they're saying 40% of customers say that azure would be their first choice. it looks like microsoft is potentially giving amazon web services a run for its money and given the growth and leverage we're going to be b seeing off pricing and margins, certainly higher multiples are probably justified. >> when you talk about higher multiples, break down the big parts of the business. azure is growing so quickly. what multiple should that get versus the other parts of the

business zbh if you you looking at azure, you're looking at a rate close to 100%. obviously, you're not going to bring that down to the bottom line but the thing you are going to be looking at here is what happens in terms of the commercial cloud computing, running about 18 .9 billion rate in the fourth quarter. the fact the business has been margins of about 50% below, but to the extent that average revenue pricing for users is ticking up, that's a business where i potentially as you see the margins improve, you probably put might aybe a 30 to times multiple on that overall, as you see mix shift towards higher growth improving margin businesses, gaining share, certainly, you're going to have to see microsoft beatin out the other legacy providers such as ibm and oracle and move towards new highs

>> when ever someone gives amazon a run for their money, they don't care about margins. what can they do going forward to make anthozure less of a cho or not their first can amazon they don't care about their margins. >> they have a pricing war >> we've seen pricing wars and amazon as a company overall has been you know, not shy about starting them. given the multiple relative to the growth rate, amazon relativ to growth expectations trading at a multiple well beyond that of microsoft, so in terms of price to earnings growth, it's less than two. amazon is higher i think am sop wants to start a price war i think potentially, the people who may suffer here, they're not the retailers. i think they're more likely the ibms, oracles, the others.

i think microsoft now has gotten themselves in a position where they're gaining significance in the share. it really a price war pushes out the marichal players, three, four, five >> david, thank you. what's your trade on microsoft tomorrow >> i understand at a certain point, you would say it's expensive on valuation, but it's a different company than it was ten years ago as well e so i think that they decerf that. >> in terms of the enroads of the tremendous growing any sort of business revenue by 97%, that's almost unheard of >> when china was growing for apples, 100% a year for a couple years, then it stopped now, it's declining. so these are great headlines they're doubles year over year, then the other point is that 50% gross margins is below the

company average in the mid 60s, so you're going to see the growth moderate, the margin pressure and you may have a margin that's more in line with something especially with the businesses declining >> extrapolation to some of the other tech earnings we're going to be getting. >> i think you have to look at legacy versus the new age of business and i think that there's only a certain amount of companies that can make that. so i don't know if you can make this where you said that earnings growth, i don't know if you can all relay that on any other business that we're going to hear. >> karen, quick. >> google also had, it's not going to move the needle so much, but you're question b about amazon competing on price i think is the biggest issue >> up next, chip stocks soaring this year. guys looking for a name for one name actually for a breakout more "fast money" coming up. ray's always been different. last year, he said he was going to dig a hole to china.

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back to the final trade. steve. >> netflix, history shows us when it pops up 10%, there's more left in the tank. >> talked about the energy space, the biggest i have lng. >> dan >> microsoft's up now in the aftermarket 4% that was the implied move i suspect some of these big cap stocks settle in so i would not be chasing microsoft >> yeah, always big. >> no, no, particularly big torl >> are you on it

>> stop. stop >> stop it >> i don't know who's not. >> shut the front door >> what's your final trade >> are we there? th26ilinx report on e th you're going to see analysts upgrade the my mission is simple to make you money. i'm here to level the playing field for all investors. 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 other people want to make friends, i just want to make you money. call me at 1-800-743-cnbc. or tweet me @jim cramer. guilt by association guilty until proven innocent i'm not