>> and of course we are getting news conferences after each of these meetings now. >> yes. >> so there is more room for misspeaking or misinterpretation. >> there is. perhaps over time it reduces the significance of each one and maybe we can take some of these off, but i doubt it. >> we'll leave it there. thank you very much. thanks for watching. that does it for "closing bell." "fast money" starts now. "fast money" starts right now with an earnings bonanza apple is higher beating earnings weeks after warning wall street. we're also watching advanced microdevices, amgen and ebay and we've got full team coverage josh lipton is in cupertino, frank holland is monitoring amgen. seema mody is going to join a call we're manning the red-eye phone and chris is standing by to give us instant reaction on the

biggest stock moves after hours. so let's get right to it apple's conference call kicking off right now. josh lipton is in cupertino where he just spoke with apple ceo tim cook hey, josh. >> mel, i did just have the opportunity to speak with tim cook last time in i talked to cook, he had emphasized this weakening chinese economy exacerbated by trade tensions so i wanted to get his take now here's what he told me he said as we got into january, things have improved from where they ended in december, and that gives us some optimism of course you don't know what will continue, but i'd also point out that seems to map to trade tensions as well there was a bit more optimism in the air in january or certainly i feel that anyways. i'm encouraged by the comments coming out of both countries i did, mel, ask him about this q2 guidance, $55 to $59 billion. that's lower than the $59 billion that the street was at so i asked him about that forecast cook saying, well, we don't attach our guidance to what the

street is looking for, we attach it to what we can do we think we can do $55 to $59 billion. revenue was down fi5% last year but only down 3% at constant currency and the effect be more this quarter on currency than it was in the last quarter. >> the way tim cook was talking about china trade, it made it seem like all of apple's woes in china are directly tied to trade as opposed to a slowing chinese economy. >> well, i think he sees that they're kind of connected. i think his argument has been, mel, that it's a slowing chinese economy and that is made worse an exacerbated by trade. i think other analysts, and i'm sure you'll hear them on the call, have questions about what going on in china more broadly i think on the call you'll hear analysts talk about are there other factors, is it pricing, is it nationalism of the chinese.

are some chinese not as taken with the latest and greatest iphones. i would expect you're getting a lot of questions on that starting right now. >> josh, thank you josh lipton in cupertino, we'll check with you a little later on the stock now back at the levels it was before it warned about earnings a month ago so is the worst over for this stock? guy. >> personally i don't think so the quarter was fine in line eps, revenue slightly bigger in terms of services, we all talk about services. it's now 12.9% of this quarter's revenue. i guess that's okay. services revenue is up 19% year over year. iphones disappointing, i think, guidance disappointing maybe the market is saying valuation is too compelling. they sandbagged us last quarter. let's get in now before the stock continues to move higher i would think fade but i may be wrong. >> the fact that they're giving conservative guidance so they won't miss two quarters in a row is a pretty compelling thought.

>> i think this is all positioning. you saw the stock actually between 12% and 15%. i'm still long in the name i don't think with slowing iphone sales and with slowing growth that it's going to be a long story, this bullish story, so i would fade as well, as guy said. >> i asked josh about china trade versus china economy because i understand that one affects the other, but there wasn't a turn-around in chinese economic data in the month of january and the month of february. >> also the concern was whether or not the iphone is too expensive for the chinese market, right? there's a lot of competition over there so that's what we'll find out on the call i think the call will be really important in this particular case on the surface, numbers were good enough to keep apple at these levels, but they're really going to have to come out and say, listen, we're not seeing any more slowdown in china and we're seeing a bit of a pickup we have a plan to get these $1,000 phones out the door and service is really picking up if they say those type of thing,

then i think you can buy this stock. >> so in china, not just the trade but the dynamics, it's good and bad you've got a renewal in the application of gaming apps which some people think will help sequentially you have then the fresh huawei kind of indictments and arrests and the dynamics be very clear, if there's not explicit, there's certainly in implicit pressure on chinese consumers to leave the ios system, no question about it people should be concerned today. i thought it would weigh on the stock. earnings are much more important examining in coming into today but that was tough news overnight the bottom line is the elongation of essentially the cycle for these phones, the asp pressure shall t pressure, the die many ynamics e not going away, this is a stock that the street is overweight on most folks are saying it's very range bound. no one is ready to say this stock has near-term upside. >> i think the huawei thing is interesting as well.

as the commerce secretary has said, what's going on with huawei is completely separate in terms of what is going on with u.s./china trade talks so we could have some sort of a deal but the charges that the company faces might be an ongoing story. >> they might be saying that too to give them leverage. they'd never say they were tied together. >> the fact of the matter is the u.s. will not want its allies or its companies to buy any equipment from huawei in 5g and that is an ongoing security issue regardless of the charges against the company at this point. >> that's probably not going away any time soon so i think that's clearly a potential headwind i'll mention this because, listen, there were a lot of good things here. the other products which they break out, $7.3 billion, that's not insignificant. so when you layer in other products and services, now you're talking about close to -- $19 billion over $81 billion, now you're talking about 21%, 22% of revenue so you are growing on the right

lines. >> the problem is, though, for apple, and i'm still a shareholder, is that it was never given that valuation that you could brag about it was never given that growth valuation. it was sort of given a stable valuation. now if we start to say, okay, it's just okay, what happens to valuation? i don't think it's going to go anywhere, but it's certainly not going up you're not getting multiple expansion. >> that's why the conference call is so important because they have to give you some hope. hey, you know what, we are going to grow and turn this company from a hardware company into a services company and it's happening right now. unless they do that, i think you meander around it doesn't mean it's a bad buy, it just means you're not going to get that excitement and a new shareholder base coming in. >> i think this is all about positioning. coming in, the buy side was much more cautious than the sell side the buy side has 40 million iphone units roughly, significant below where the street is. i think it's all about positioning an all about sentiment. this company is not markedly

different than two quarters ago. it's totally sentiment i think sentiment has gotten overly extreme and it's been made extreme by the dynamic in china which is believed to be the key to apple sales it may be in the short run, but right now i think the positioning is the biggest part of the story. >> and the lack of transparency into their numbers taking a metric away makes them a different company than what they were two quarters ago we've got less information. >> and to steve's point about positioning, tim's as well, it's interesting. so they warned the stock was trading $144 iphone sales revenue is down i think 16% year over year now you have the stock trading 161. so you talk about, well, this is going to come out wrong, but a bit of sleight of hand and -- >> guy, that came out wrong. >> but i think the folks at home know exactly what i'm saying. >> that's amazing, you get less clarity but as soon as we come out with the services number, people wanting to know why -- i want to break down the services

number i want to see where exactly the services number. so they're not going to get clarity through the iphone sales but going to go to services and pick through the data. >> right i was talking to an analyst today from raymond james and he was saying a big bulk of services is apple care so what happens when unit sales go down, which we don't know because they won't release unit sales. you don't need apple care on your phone. >> and the whole services growth is based on this unit growth idea so i think they really, really botched that last quarter when they just kind of shocked everybody by saying we're not going to break things down so they have to come out and give a little bit more information on what the company is going to look like. otherwise i think they have a real credibility problem on wall street. >> so i hear what you're saying, but everything you just said to me means that the market needed to make an adjustment. guess what, it made an adjustment they told you stuff you didn't want to hear, they told you they're doing things a little differently. they didn't change their

business overnight, just the market's perception changed overnight. i think the buy side of the street believes this stock is cheap. >> for more on apple's earnings, let's bring in gene munster. gene, what's your take on the quarter? >> melissa, my first reaction is i'm surprised that the guidance wasn't worse specifically they guided the high end of their guidance would suggest it's in line with the street keep in mind apple does not want to miss two quarters in a row so i thought that was an impressive positive the other earnings tha been coming in, the macro is impacting everyone and apple is doing a great job of navigating it that said, it was a miss another piece to this is the earnings was more powerful than i expected typically when companies miss their revenue, the earnings falls dramatically below plan. in fact they did deliver record earnings and so kind of putting this together, i think that explains kind of the reaction of the stock. one last more fundamental piece that jumped out at me was the

services growth, margin growth in services year over year going from 58% to 62%. i think that's comforting for investors because they're putting a lot of weight in the services opportunity longer term. >> true. i think that's comforting, especially in an environment where it's expected that hardware margins will go down over time, but in terms of services as a percent of total revenues, gene, is that growing to the point where you think it needs to be in order to keep people in the stock? >> it's slow it is growing to a point where it's clear lly a topic we are a focused on so i think it is growing fast enough, 9%, in line with expectations the point where it's a critical mass is probably 30% it will take us years to get there but i think the trajectory and profitability are very encouraging. this is also in the face of some negative headlines around their services business, in particular netflix and spotify starting to drift away from using their payments platform. so i think that shows just the

broader strength of the service offering and how that can -- the trajectory should be higher margins in the future. >> do you think that the root of apple's china problem is in the u.s./china trade war >> i think that has a measurable impact i think that, you know, it's obviously hit a lot of different companies, so there's probably more to it if you're going to ask me to guess, i think probably a quarter of it is related to essentially some brand damage that's happened. >> a quarter of apple's china problem is a china trade war so 75% of the problem in china would remain even if the trade talks resolved favorfavorably? >> yes they haven't dived into it in the call i think the china piece will take a year or so to work itself out. i think part of the china problem can be corrected relatively quickly on the trade side. >> we'll check in with you again, gene, thank you let's get some analysis on earnings and the charts, let's get to chris verrone.

>> good response after hours, that stock is back above that $160 level i think the way the stock responds here just tells you how much damage had been done, how low the bar was going into these number what we're showing you here are the declines in apple over the last four or five years. we're already down 40% into that number we were down 33 in '15-'16 and down about 40 in 2013. so these have proved to be bottoms in the past. i think that 150 level that we held a few weeks ago is really key. it's right on the trend line we bounce up when you look at the sentiment around the stock, sentiment is washed out, the stock is responding well. we think this was a good washout where buyers of the stock are right here it's not the only big name today. we had amd that reported as well very solid response, up about 8%

after hours. it's another name where a lot of the damage was already done. this is a 50% decline in amd over the last six months we held very importantly the $16 level that it broke out from early last year. we're now back above that 20 range. we think this is a stock on its way back to 25, perhaps even 30. apple, amd the damage has been done, we think we're past that and we're buyers of both stocks. >> does that imply, chris, specifically for apple that the stock is not range bound, and what level does it need to reach in order for you to be confident that it's broken out of where it is >> well, i think we can look to those lows from a few weeks ago near 150 as a stop for any long. i think the big message here is when you look at the stock, you took out a lot of optimism after the last two or three years. down 40% is a big move down. you priced in a lot of bad

outcomes holding 150 is key getting back above 160, which we've done today is important. we think you're paback on your y to 180, 190 over the next six months. >> chris, thanks let's trade some of these names. amd we haven't talked to yesterday but a lot of concern after nvidia's warning yesterday before the open. we had amd concerns as well because they overlap in a lot of markets. >> but amd is in other markets doing better than intel. what we have said pretty consistently is don't confuse intel -- some of the malaise with intel to be amd's as well i understand why amd got sold off with the rest of them. they got caught up in that maelstrom. i think it separates itself from other names, for example, like lam research and xilinx. >> this is a stock that went from 10 to 33 on a valuation that was very difficult to explain. there's a lot of short covering in the name. the semis are still a wide group

in terms of what at least the valuations are within that group and haven't really necessarily righted the ship if we talked about the two names here, no question apple has more upside the range bound nature of where markets are right now, i think apple if anything is the one stock -- >> why is there no question in your mind that apple has significantly more upside than amd? >> sorry >> why in your mind is there no question apple is a better buy over amd. >> first of all, i think amd has had more of a snap rally year to date apple is absolutely flat, underperformed the s&p by 600 basis points first of all, we needed these numbers out of apple today again, chris pointed out how the street has been offsides on this i pointed out how i think the expectations were very, very low. now the valuation, you can really explain by the way, tim cook is actually telling us the situation in china is better than we think. i'm not so sure we need to trade on that. >> is there a fade both stocks option here? i think you fade both stocks i do like on a technical level amd looks more supportive right

here using like a 200-day as a stop out there, but apple, i think, structurally the story has changed. amd is more of a moving target it's a higher beta definitely apple is a longer term hold, but shorter term you'll catch a lot of headwinds. >> i like amd a little better, don't want to buy it up 10%. the key word for both of these earnings reports, stability. as long as there's some stability out there, i think you could start to form a bottom. more on apple throughout the hour as the conference call is ongoing. we'll bring you all the headlines. plus check out amgen that stock is sinking after hours. they have within outperforming the health care sector by a long margin this year and later, amid the earnings deluge, jerome powell is getting ready to enter once again. will the fed release the doves we've got all the details. we're live from times sqren ua i new york city. much more "fast money" right after this

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unstopand it's strengthenedting place, the by xfi pods,gateway. which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. welcome back to "fast money. shares of amgen falling on the back of its earnings report. let's get to frank holland back at headquarters with wall street's reactions to the results. >> good afternoon, melissa we spoke to five analysts and none of them surprised despite solid beats on revenue and on eps. the weaker guidance has been part of a pattern for the past

six quarters where they eventually ended up beating. yi saying we think the stock is down and expected reaction but the guidance is ultimately conservative he's say conservative, not weak. ken is saying the beat was largely due to legacy products, which won't see shareholder reward due to impending risks by generics and similars. the company is really under intense pressure on its best-selling drugs another echoed that sentiment saying she's expecting to get more insight on what people are calling weak guidance from the call that started at 5:00 and is still going on right now she is saying on the call we are focused on oncology, and other things its best-selling drug did see a decline in sales but revenue beat estimates so a strong beat on revenue and analysts are listening to the call and waiting for more on why

the company issued what they are considering weak guidance. >> for more analysis of the earnings, let's bring back chris verrone who is over at the plasma. >> we actually like the group and i recognize amgen is down modestly after hours when we put this 2% decline in some context and look at the longer term chart here, what we really see with amgen over the last three years is a series of high or lows 140, 150 we now think that 180 level is key. on any pullback we've got to hold 180 and i think ultimately you can move toward a breakout above the 200 level. importantly, the stock is actually improved some relative to the s&p now, our favorite biotech name in the whole space is regeneron. it's on the verge of breaking out. it's already done it in relative terms. when you start to pick apart the

pieces within biotech we finding names like this one exhibiting relative leadership. we want to be long here. on theother side, there's some misses here. i think the move here in abbvie recognizes how bifurcated the space is i think importantly you've rappelled right at the downward sloping 200-day average. new lows, failing at the 200, i think this is an example of one you want to avoid. buy the weakness in amgen. >> i'm glad chris mentioned abbvie, because it was their warning on humira that caused concern for the embrel business. when it comes to biosimilars, neulasta so two major drugs that are facing some pressure and or competition. >> rheumatoid arthritis. embrel beat on revenues.

but the guidance wasn't conservative, the guidance was miserable. next year the street was looking for $14.57 they guided $13.10 to $14.30 first of all, you can drive a truck through that and that's pretty lousy guidance. i'm surprised the stock is not down more than it is again, this was a good quarter but to say that's conservative i think is giving them the benefit of the doubt. >> both those drugs in 2023 are going to be cut in half as far as their projections and what their revenues will be so you've got to have a tremendous pipeline. why not make it easy on yourself and the ibb has had its best month in two years buy the ibb instead of taking all these risks on these one-off fda approvals. >> embrel will face competition in a couple of years. >> that's true neulasta is almost as big a drug for them and they crushed it on that one for what it's worth, this is a very, very strong quarter. it tells you how bad the

guidance was this was a stock that i would argue has been very defensive, as steve pointed out, the entire sector largely has been. 101 is the 200 day i think if it holds this is a stock people wanting to stay in. >> i like buying the ibb the whole idea is they'll have to buy some kind of drug so they no longer have the competition and have to carveout a little bit of a niche the only thing i don't like about the ibb is how much it's run up this year and it's right against roughly 111 or 112 that seems to be resistance. i would let it prove it to me. let it break out before you get into that. if you want to play the biotech theme, that's the way to go. >> it is up 20% from december 24th lows. >> last year the trade, it was down 10% last year, then up 20%. so this could be a settling in stage. but with the ibb you'll get them in those top couple of holdings. if you want to be in this space, that's where you should be. >> let's check in with gene

munster who is listening to apple's ceo, tim cook, on the conference call. gene, what stands out to you >> melissa, the call has taken a different direction. they're still in prepared remarks but typically when companies have an unprecedented miss like that, they sending a lot of caution to investors. instead apple is giving some confidence that they can work through this, increase and encourage people to upgrade. they're giving investors encouragement this storm too will pass. >> thanks, gene. for more on apple shortly, the stock is up 6% as you saw there. also still ahead, it is the moment that all of wall street has been waiting for will the federal reserve say the words every investor wants to hear the traders will weigh in. you're watching "fast money" on cnbc, first in business worldwide. a lot more "fast money" coming up after this.

welcome back to "fast money. aside from the busiest week of earnings season, the markets are watching the fed bob pi saun pi sauny has what'sn investor's minds. >> the fed may have had something to do with this. first there's the fed drift. this is the well documented tendency for u.s. equities to rally in the 24 hours before a fed meeting concludes. next here, we've got the markets have come to believe that the fed an othd other central banks getting on their side and that's the dovish side. in the last couple of months central banks have signalled they will not be raising rates aggressively there would be hints they'll be very stimulative if they need to be china has already taken this path this change is critical to market sentiment

traders believe the two most important issues that determine the direction of stock prices are first earnings and second liquidity. liquidity is how much money there is to invest and the primary determinant of liquidity is central bank actions. traders acleary are expecting a more dovish fed. they said they would be patient before raising rates that's different than gradually raising rates so will that sentiment be reflected in the fed statement. our survey says 100% expect the fed not to hike in january while 78% expect one rate hike in 2019, 17% expect a cut. as for 2020, those numbers drop to 48% expecting a rate hike and 37% expecting a cut. finally, there's this issue of the fed's balance sheet. powell has shifted away from the idea that they are on auto pilot and reducing the balance sheet each month

the question now is what is the overall impact on interest rates when the fed stopped buying treasury and the deficit is rising tame. th -- at the same time >> so will the fed deliver tomorrow or with a press conference after the decision is released, is that -- does that introduce volatility >> well, that's going to be the key. powell has successfully walked back the kind of hawkish tone that he took that really rocked the markets. i think he should probably take a do no harm approach to this. don't say anything that's going to change what's going on in the market clearly they're impacted by what's going on with the stock market so i would just say the wild cards here are if they say anything about auto pilot, going back to that auto pilot, that would be negative. if they say anything about the balance sheet maybe expanding or an operation twist type of thing, i think that would be very positive for the market. >> operation twist >> well, reverse. >> we had all kinds of creative

things out of fed a few years back i agree with brian, i think the risk is to the downside for the markets in terms of expectations here first of all, we were at 8% expectation of a june hike just after kmchristmas time we're closer to 20 again last week most of the equity market's rally was about this. we have a payroll number on friday consumer confidence today was awful. we're at a level we haven't seen since july of '17. expectations were back to 2016. >> i liked -- nobody but me likes this, but i liked the october jerome powell much more than i like 2019 -- >> the markets didn't like him. >> i understand. i get it but i would like -- listen, we seem to be on more stable footing, it appears to be. especially given the results of apple's earnings today i would like for him to say, you know what, the market seems to have corrected itself. he won't say these things, by

the way, and we're still on board with reducing our balance sheet. not necessarily -- >> auto pilot. >> -- auto pilot, and we're still looking at two hikes this year. >> there's zero chance that he could be any -- dovish enough. the market is already pricing in the ultimate dove. there's 100%, zero chance of him raising rates tomorrow anything he says now is going to fall short so i agree i think it's downside risk to the market but the problem is the market has run so aggressively that he might open up his mouth and that's going to be the biggest problem for the overall market. >> so a bounce-back that took place in one month is enough for the fed, for jay powell to actually take back some of the dovishness and introduce some hawkishness? >> yeah, i absolutely think so clearly a couple of days after he made those statements, the market fell. all of a sudden they trotted out every fed president to say we didn't really mean that. i think in general if there's one tell out there, look at what gold is telling you. gold is on fire. it's telling you that central

banks around the world are going to start turning on that spigot again. that's the view i'm getting. >> financial conditions are significantly looser than six weeks ago and certainly a lot looser than ten weeks ago when you had rates at 3.25. so the fed is paying attention to these dynamics. if the fed was affected by market conditions to actually push things, because again, the data has not in this country gotten significantly worse, let's be clear so we saw financial conditions sees up somewhat in december if the fed reacted to that on the downside, i think they're reacting on the upside. let's get a check on apple as we head to break. the stock is up 6% tim cook gives his three keys to apple's long-term success on the earnings call. gene munster will bring us the very latest. amd and ebay both out with reports. we'll bring you the adnehelis driving those stocks higher when "fast money" returns

welcome back tomun"fasty -- "fast money. >> ebay shares giving up some gains as the conference call depose goes on. if you were hoping to hear more how they would respond to activist investors, you were likely disappointed. have a listen. >> we feel strongly about our ability to deliver value now and in the future to our customers, employees and shareholders

finally, i appreciate that there will likely be questions regarding the letter elliott issued last week commenting on our business we've issued our public response and will not be discussing this further during today's call. >> last week ebay simply said it would review elliott management's proposal. we won't get more on how it's going to implement or not implement some of those proposals, but ebay did issue a defensive den dividend for the first time ever, 14 cents a share the ceo said it was something they started looking at before elliott management published its letter the ceo also spoke about numerous cross-platform opportunities across stubhub and classifieds, signaling that it is unlikely to be sold or spun off. that was another one of elliott's proposals for the company to unlock shareholder value. elliott is calling for ebay to revitalize its marketplace gmv or gross merchandise value came in light, relative to the

street's expectations. >> all right, thank you, deidre. so here's a question is the only reason to be an ebay stock the hope of some activist intervention >> i actually thought this was not a bad report i mean you have the activist intervention as potentially a tailwind but the other thing i like about this, there's 15 buys and 21 holds from the analyst. so there's a lot of room for upgrades here. i thought the quarter was fine. >> this is a problem for me. when you sell off things that are supposed to be good, i have a problem with that. the core business has underperformed for quite some time now it's underperformed amazon and alibaba. it's not in people's vernacular to talk about ebay anymore i don't like the fast you're selling off some of the things that are your biggest assets so i do think the only reason why you've seen it pop recently is because of the activism it's down dramatically from a year ago. >> their marketplace is up 5%. i think the activism put a big charge in this docket, it's up

25% going into the numbers none of this surprised me. this is a neutral stock. it's not a bad stock, they're certainly doing fine they also said the consumer was slowing in december so let's watch that that's clearly a big deal for them. >> i agree with everything, the stock went from 27.5 to 34 so i understand why it's selling off. to b.k.'s point, the quarter wasn't terrible and they authorized $4 billion of stock repurchase for a company with a $37 billion market cap that's not insignificant so i think on this sell-off you could take advantage of it and buy it. >> still tracking the two big tech movers, apple an advanced micro. we'll hear from the ceos and the earnings deluge doesn't stop there. the traders will tell you which mo "sttcngy are wahi refa" still ahead.

welcome back to "fast. apple is up about 6% here and the move is giving all of the fang stocks a boost. tim cook is speaking on the company's conference call. josh lipton is at apple headquarters to tell us what he had to say hey, josh. >> well, mel, we know tim cook has talked a lot about the challenges his company is facing in china, but he started off this call talking about what he thinks is going right in china take a listen. >> we generated record december services revenue in greater

china fueled by an amazing ecosystem with over 2.5 registered ios developers. we saw very strong results from our wearables business with revenues up over 50% we also continued to grow our total active installed bays by adding new customers in fact, more than two-thirds of all customers in china who bought a mac or an ipad during the december quarter were purchasing that product for the first time >> now, there's a lot of talk on this call, mel, too about services we did get that services gross margin figure for the first time the cfo saying that's an increase of 170 basis points sequentially the very first question on the call came from morgan stanley. she wanted to know it looked like the services growth rate had decelerated from recent quarters he chalked that up to headwinds.

deceleration in apple care he also pointed out an issue that impacted the app store in china, notably there was that gaming freeze that we had seen there. i'll hop back on the call and bring you more headlines as they come. >> josh, thanks. apple shares up 5.25%. gene, what did you make of the comments so far? the comments owe far on what apple said >> we're just getting into the thick of this q & a so it's getting juicy here the issues are around the services growth. some of the deceleration surprised some of the analysts so i think tim cook did a good job of explaining why the strength continues second, the number of active iphones, 900 million, 10% year over year. that's better than what investors expected they thought that base is essentially flat, so i see some optimism around that overall the tone of the call continues to be that they have the strength to essentially wade through this macro headwind, so encouraging from that perspective. >> gene, can i ask you a

housekeeping question. that is active installed base. if i'm a person with three devices, does that active installed base go up by three even though it's one person, and my subscriptions to some apple services may bow te the same ac my devices. >> you would account for three active installed bases subscription revenue is per account. so one account and three active devices. >> how does active installed base give you a better read on what the services revenue would be. >> the bigger the installed base, the more shots on net essentially. it's not a one for one because people can add devices and not add accounts but in general a growing installed base is positive the miss is on a lot of the new iphones. so the reason why that base grew is that people who had existing iphones resold those there's a lot of ways to do that apple is one way to do that. those go into emerging markets

and activated as new accounts. 60% of service revenue comes from outside of the u.s. we had expected that number to be 50% i think that that's a sign that this essentially growing active installed base is having a positive effect on services growth, particularly outside of the u.s. >> now, gene, i cheated and i looked at what you're grading the quarter and that would be a "b." growing up in my household that would be a failing mark. so what is the primary driver for the "b" grade? >> so the "b" is -- you miss a quarter, you can't get an "a." i think you have to take that, that it was clearly a miss, unprecedented miss but i think there might be a little bit of a footnote to this "b." if you take into the overall macro, things we've heard from all different companies, i think it's more like an a minus type of grade i think they did an outstanding job. the idea that a company misses

revenue but still has record earnings, i have never seen that i think that's probably a way to think about this as almost two grades in this quarter. >> all right, gene, thank you so much for all of your analysis tonight. gene munster guy, do you still stand by your thesis at the beginning of the show that the worst is not behind apple given what we've heard on the call so far >> "b," to your point, not a great grade. me, i was doing back hand springs. the reason why, and gene can verify this, eps record quarter, they're buying back a lot of stock. that helps their guide for the next quarter suggests decline in revenue. iphone sales are down 15% year over year. i think the market is telling you that the move from 225 to here makes it all on the stock i'm not certain that's the case. >> gross margin wasn't stellar when you look sequentially it would be a decline given their commentary. >> and so people are looking for, again, the falling esps as

good to indict the company over. look, they bought back $12 billion or gave dividends. that's one of the value drivers for being a shareholder here the services revenue in greater china was record for a difficult quarter, not bad. >> check out shares of amd still spiking after hours. the ceo speaking on the call right now. we'll hear from her in just a few minutes. plus, one trader is betting this stock could surge nearly 20% in the next week we'll tell you what it is. we're live at the nasdaq market site in times square chor"ft ne sll ahead. a luxury carsary to create more teched out than silicon valley? with a cockpit fit for aspaceship. hang on. radar that senses things the human eye can't. busted. and the ability to make a thousand decisions before you even make one. was all this, really necessary? what do you think? ♪

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we're working to make things simple, easy and awesome. welcome back the busiest week of earnings rolls on tomorrow. take a look at this full slate of big names set to report boeing, mcdonald's, facebook, tesla, microsoft so which names are the guys here on the desk watching the closest. tim? >> i think you have to be watching microsoft this has been arguably the most consistent company over the -- >> are you going to say maga >> i thought about it and decided not to bring it up you have now brought it up so at some level dan nathan is smiling. the bottom line here, in a world where we've heard negative feedback on cloud an gaming, these are big areas for this company. actually i think they're the ones that could at some point start to tell you they're seeing a slowdown if they do, this is another one of those names in the short run, microsoft has been outperforming. >> grasso, which one >> if you look at tess larla, is

been all over the map for me there was talks back when you had the s.e.c. investigation this stock could be cut in half. i was one of those looking for it to be cut in half, then it rallied aggressively if it doesn't hold this price where it's at right now, this could be in trouble for them as far as cash flow and funding. >> mcdonald's. a lot of people will say potential double tops around 190 or so. valuation potentially a concern. i think mcdonald's is interesting. i think they're going to boat an i think you blow through the 190 level. >> what are you watching >> i would agree with himon that the other m amain maga is mcdonald's mcdonald's is going to give you a view on the restaurant sector, the consumer boeing will tell you what's going on with the industrial economy around the world how much was it impacted by the slowdown in december. >> speaking of tesla on deck for

earnings, despite elon musk's warning of a difficult road ahead, one option is betting on a rally for the talk mike khouw >> one of the trades that stuck out today was the purchase of 1,000 of the february 8th weekly 3.45 strike calls. they werespending just a littl over $3 for those so this is making a bullish bet it's going to be above throw 345 by this cg friday a move of that size over a like amount of time is rare but not unprecedented. we have seen five moves of that in that magnitude or larger in the history of tesla earnings. that could also be a hedge for one of the many people who have big short positions in the stock. >> mike, thanks. for more options action, check out the full show friday at

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welcome back to "fast money. amd is up about 8% after hours the ceo is speaking on the call moments ago. take a listen. >> we reached an important milestone in our business in the quarter, as our high margin data

center cpus and gpus accounted for a midteens percentage of overall revenue. while we expect our data center revenue to be -- the ramp is beginning to contribute meaning fully to our financial results. >> the question is shall is amd in a better position than nvidia they operate at a very different price point from nvidia on average. on average their selling point is much lower, about a third of where nvidia is. what's the answer? >> it tells you how competitive it's getting and where people have different approaches to their business model also on data center, this is something that intel really warned on. they're talking about it being meaningful they're taking market share. >> what do you do with semi conductors in general? you had xilinx which is good, amd which is good, nvidia and intel. what do you make of it >> well, amd has been a tough sled the last couple of months,

but i think you stay with amd, you stay with lam research and xilinx intel told you all you need to know you're not going to get killed in it but it's not going up 10% in one day either. >> when you look at a name we haven't talked about, micron and d-ram, d-ram tells you ever you need to know about micron and micron tells you everything you need to know about the global slowdown in the semi conductor business i think that you want to be seller of all these names. time for the final trade tim. >> again, we've got a lot of biotech out there. amgen, i think this company continues to execute a lot of this drug pipeline, priced in. >> brian kelly. >> do not ignore what's going on in the gold market i'm going back to fast money circa 2010 buy gdxj. >> grasso. >> there was a lot of red in the home builder space you know what wasn't

lennar >> guy. >> i think the weakness in ebay, and if i join the site today it's the first time i'm ever on the site but if you buy the weakness, it's ebay. >> thanks for watching see you back here at with jim starts right now my mission is simple, to make you money i'm here to level the playing field for all investors. there is always a bull market somewhere. i promise to help you find it. "mad money" starts now >> hey i'm cramer welcome to "mad money. i don't want to make friends, i'm here to make you money call me. tweet me when is a miss not a miss? that is the question when the stock siis inexpensive and void of any love, that's