PreMarket Prep: Piper Jaffray's Mike Olson Talks Tech Earnings

PiperJaffray analyst Mike Olson offered a bullish analysis of four major tech stocks on Friday's PreMarket Prep podcast. 

Apple

Apple Inc AAPL’s first-quarter 2018 earnings report detailed weaker-than-expected iPhone sales, alarming some investors and sending the share price down.

The report isn't necessarily concerning, and Apple ASPs were headed upwards due to a higher percentage of iPhone X sales, creating a better mix, Olson told Benzinga. 

A major surprise in Apple’s earnings report was the strong performance of the Apple Watch Series 3, but Apple is “still an iPhone story," said Olson, who noted that 70 percent of Apples sales come from the iPhone.

The analyst said he does not find Apple's debt levels troubling, explaining that Apple is still a cash-strong business. Historically, Apple has raised debt due to limited access to cash held overseas. Due to repatriation, Olson said he's expecting Apple to raise less debt.

Shares of Apple were down 3.93 percent Friday afternoon. 

Take-Two

Take-Two Interactive Software, Inc. TTWO announced Thursday that the release of the long-awaited "Red Dead Redemption 2" would be delayed until October, triggering a sell-off and drop in share price.

In Olson's view, the delay represents a buying opportunity and does not speak to Take-Two's fundamentals. 

Take-Two reiterated fiscal 2019 guidance despite the delay. This is likely a sign of ongoing strength for "GTA Online," which is the engine behind the company’s revenue for now, Olson said. Olson said he is still modeling "Red Dead Redemption 2" to sell 16 million units upon its release. 

Take-Two shares were trading down 1.71 percent Friday afternoon. 

Amazon

Amazon.com, Inc. AMZN shares rose upon the release of the company’s Q4 report. Olson called it “a very strong report," noting the upside on all segments. Amazon is expected to invest heavily in many of its segments, Olson said, adding that he has been modeling the company at the high end of its guidance range due to its tendency to exceed guidance.

Amazon shares were up 4.23 percent Friday afternoon. 

eBay

Little additional upside exists for eBay Inc EBAY, Olson said. While the company has “done a good job of taking a tired brand and cutting costs," but the stock may already be reflecting this, Olson said. 

Conversely, eBay’s migration away from PayPal could present new opportunities to drive long-term operating income and a better experience for sellers, the Piper Jaffray analyst said. 

At the time of publication, eBay shares were down 3.12 percent. 

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PreMarket Prep is a daily trading ideas show hosted by former floor trader Joel Elconin and prop trader Dennis Dick. You can listen to the show live and participate in our chatroom every day from 8-9 a.m. ET here. The show is also available on YouTube Live. The podcast is available on iTunes, Soundcloud, and Stitcher.