Amazon Is Newest Member of $1 Trillion Club

We have another, albeit brief, member of the exclusive $1 trillion market capitalization club. Earlier this afternoon, Amazon (AMZN) joined Apple (AAPL) as the only publicly traded U.S. companies with a market capitalization of $1 trillion dollars. It is a crowning achievement for the company which is now up nearly 75% year to date, and over 45% since the early April pullback brought on by the tirade of tweets from President Trump (read why we felt that offered a tremendous buying opportunity here.)

Amazon, which has been the recent darling of FANG, rapidly climbed to this valuation thanks to last week's monstrous price target increase by analysts Morgan Stanley. In their note, which we previously discussed in our Alert here, they championed the company's upcoming earnings power and how the continued strength of several high margin revenue streams (think Advertising, AWS, and subscription services) will drive profitability and more estimate revisions in the future. We recognize that the stock is grappling with our own price target, and our continued belief that there is plenty more to come in advertising, AWS, and subscription services has us in upward review of our price target as well.

Now club members may recall that Morgan Stanley took up their price target on another FANG stock that day, but it has not fared nearly as well as AMZN since then. That stock, of course, is Alphabet GOOGL . What has dragged GOOGL down over the past few trading sessions has been the overhang related to the Trump's Administration scrutiny over its search engine, a digital tax imposed by the European Union by year end, and a Tuesday Facebook FB downgrade by the firm MoffettNathanson that has brought down GOOGL in sympathy. Having said that, we believe there is plenty to like with Alphabet as its fundamentals remain strong, especially with the upcoming Waymo monetization outlook. We reiterate GOOGL should be bought on weakness, including today's lower move, as we wrote last week in our Alert here.

Lastly, on Facebook, shares have fallen over the past month due to social media scrutiny and lack of comfortability with management's margin outlook. Down at these prices, we believe FB has become overly discounted relative to its fundamental performance, and we remain of view that management's weak guide could ultimately prove to be an under-promise, over-deliver scenario when the company reports next. Facebook operates in a large total addressable market in the internet space, and they continue to increase its active user base at strong engagement levels. However, the stock is a "show-me" story until then, and we will keep our TWO rating until we see the sellers shake out again at a valuation more compelling to upgrade on.

Jim Cramer and the AAP team hold positions in Amazon, Apple, Alphabet and Facebook for their Action Alerts PLUS Charitable Trust Portfolio . Want to be alerted before Cramer buys or sells AMZN, AAPL, GOOGL and FB? Learn more now.