Apple Inc. (AAPL), Facebook Inc (FB): Should You Buy These Big Names After Earnings?

The recent earnings season has provided investors with many surprises, both positive and negative, and has sent some popular stocks soaring.  Let’s look at three Nasdaq stocks to determine if they are good additions for your portfolio post-earnings.

The maligned tech giant

Apple Inc. (NASDAQ:AAPL) has had a lousy 2013 and coming into its most recent earnings report, the company had retested its 52-week low of $390. The company was hit by a series of declining price targets by analysts and it could seemingly do no right.  Expectations for the third-quarter earnings release on July 23 were muted, to say the least.  However, Apple released a report that silenced quite a few critics.
Apple Inc. (NASDAQ:AAPL)

Apple Inc. (NASDAQ:AAPL) reported revenue and EPS that beat consensus estimates, but the real strength of the report was in iPhone sales for the quarter. Apple crushed analyst expectations in the mid 26-million unit range by selling 31.2 million units. The iPhone is by far Apple Inc. (NASDAQ:AAPL)’s most important product and the one most closely followed by analysts. It is important to note that iPad sales were below analysts expectations and gross margins continued to decrease. The report was well received by investors and Apple Inc. (NASDAQ:AAPL) has continued an upward trend in stock price.

Returning to IPO glory

One of the biggest earnings surprises was Facebook Inc (NASDAQ:FB)’s massive beat on the back of strong gains in mobile advertising. The company crushed analyst expectations on revenue and EPS, reporting $1.8 billion in revenue and $0.19 EPS versus expectations of $1.6 billions and $0.12.

The company also saw strong gains in users, as active users for the quarter were up 21% year-over-year. The report was well received by investors and the stock soared, recently eclipsing the $38 IPO price unseen since the actual IPO.

The entertainment roller coaster

Netflix, Inc. (NASDAQ:NFLX) has had quite an interesting year as the current stock price is nearly five-times its 52-week low. The company released a strong report, with earnings quadrupling versus the prior year, but disappointed in subscriber growth. New subscribers came in at 630,000 versus the company’s high-end expectation of 880,000 for the quarter. The company also failed to see the spike in new users that it hoped for when releasing new episodes of the comedy “Arrested Development.”  The report did not please investors and the stock dipped after the release.

Looking ahead

Of the three stocks, Apple Inc. (NASDAQ:AAPL) remains my top pick.  The company showed that it can still sell its products and crush analyst expectations.  The company is also about to end the lull in its production cycle and new product releases can be expected in the next six months.

Recent conversations with China Mobile could provide a major catalyst, as could the release of the iPhone 5S and the cost-effective iPhone rumored to be called the 5C. Updated iPads should be a given, and a rumored iTV could also add fuel to the stock price. At a current P/E under 12, the company has plenty of room to grow should these new products become hits.