Affirm explodes with Amazon deal; Zoom dips on slowed growth

Another milestone in the world of e-commerce was praised by investors this week.

Shares of Affirm Holdings Inc. skyrocketed nearly 50% on Aug. 30 after the company announced it is testing its buy-now, pay-later product with select Amazon.com Inc. customers, enabling them to split purchases of $50 or more into monthly installments.

The commerce-lender partnership may bring $385 million in revenue to Affirm in calendar year 2022, which would account for about 22% of Affirm's revenue that year, according to an equity research report from Deutsche Bank analysts Bryan Keane and Korey Marcello.

Amazon appears to have higher negotiating leverage in the deal because of its scale and the high customer conversion rate.

A prevailing question on the table is what Amazon will do with its current installment programs, which split payments into five parts over the course of 120 days.

Affirm shares closed at $98.99 apiece on Sept. 2, up 45.8% for the week to date. Amazon shares were up about 4% over the same period.

In the world of remote work, Zoom Video Communications Inc. stock fell more than 11% in after-market trading Aug. 30 after the company reported its first billion-dollar quarter that beat expectations, but forecast slowing growth compared to the pandemic-fueled prior year.

Speaking during the company's earnings conference call, Zoom CFO Kelly Steckelberg said customers are returning to more thoughtful and measured buying patterns compared to the previous year, during which most of them were trying to keep their businesses running and buying very quickly. The video-conferencing company's revenue for the quarter ended July 31 totaled $1.02 billion, up 54% year over year from $663.5 million and above the S&P Capital IQ estimate of $990.3 million.

Wall Street was cautious about Zoom's future performance. CFRA Research analyst Keith Snyder cut the company's 12-month price target to $350 from $460, saying that he expects to see additional acquisitions from Zoom as it expands into new markets.

Zoom closed Sept. 2 at $295.09 per share, down 13.4% for the week to date.

In cybersecurity, shares of CrowdStrike Holdings Inc. were down this week after the company beat Wall Street earnings expectations but raised concerns about continued revenue growth.

The company reported revenue of $337.7 million for its fiscal second-quarter 2022 earnings, up from $190.0 million a year ago. However, the company's annual recurring revenue for the quarter — calculated as the annualized value of customer subscription contracts — was more moderate than in previous periods.

Still, analyst sentiment for the endpoint protection titan was mostly positive. Jefferies analyst Brent Thill raised his price target to $335 from $281 and maintained it at a "Buy" rating, saying that cybersecurity services remain "mission critical" to protecting businesses.

Crowdstrike shares closed at $272.67 apiece Sept 2, down 3.4% for the week to date.

In consumer electronics, shares of Apple Inc. closed up 3.4% for the week to date.

The tech giant on Sept. 1 said it would allow third-party media apps like Spotify Technology SA and Netflix Inc. to create in-app links to sign-up pages on their respective companies' websites. The move was made in efforts to close an investigation into anti-competitive practices by the Japan Fair Trade Commission and will apply globally to other "reader apps" in the company's App Store.

The same day, Apple shares rallied to an almost record high at market close after Wolfe Research analyst Jeff Kvaal raised his price target on the company to $155 per share from $135.

Apple shares closed at $153.65 apiece Sept. 2.

In the broader markets, the S&P 500 was up 0.6% to close at 4,536.95 for the week to date following a strong jobless claims report on Sept. 2 indicating a record-low in U.S. claims since March 2020.