The Slaughter House, Q2 Earnings Bleeders: Yahoo! (YHOO) And Amazon (AMZN)

Amazon (AMZN) is not a good company. It is a great one. Bezos has cut marketing and technology costs. He has made a smart move to get into China. The Unbox looks like it will be a successful VOD over IP platform. The company”s central businesses of selling books, CDs, and DVDs appear to be doing well.

But, these shares are up 85% in the last quarter. Matrix Research, BWS Financial, and Stifel Nicolaus have all downgraded the stock recently. According to First Call, sixteen analysts who cover the company have a median price target of $57.50 on the stock. It trades at over $70, much of which was on forced short covering.

The next quarter would have to be beyond Wall St.’s wildest dreams to keep these shares up.

Yahoo! (YHOO) is still a mess. Speculation about a Microsoft (MSFT) took the shares above $32 in late April, but they have only settled back to their 200 day moving average. Trading at nearly $28, they are well above their 52-week low around $23.

All evidence from Hitwise and ComScore shows the company still losing search share. The buzz around Panama has disappeared. Nothing said at the shareholder meeting encouraged buying. The departure of Terry Semel has not helped that stock as most market observers thought it would. And, the company is already saying Q2 will be rough. If guidance for the second half is as bad as some think it will be, the shares could drop further.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.