Microsoft is narrowing the gap with Apple in the stock market as investors see better growth and far less China risk in the software giant.
The company’s shares have outperformed the iPhone maker’s this month, bringing its market value closer to Apple, which is at the centre of a
“We have more faith in Microsoft’s margins, while the cloud and AI are growth areas that can stand the test of time over a decade. We don’t know if the iPhone can do the same,” he said. “It’s hard to make a bear case for Apple, given its services business, but the bull case clearly favors Microsoft.”
The last time Microsoft was larger than Apple was in November 2021. Apple’s market cap is nearing $US2.8 trillion, down from a peak of nearly $US3.1 trillion but still above Microsoft’s $US2.4 trillion. While Apple shares have dropped this month, Microsoft has held steady, narrowing the gap between the two to roughly $US200 billion at one point last week.A preference for Microsoft over Apple is fairly common on Wall Street.
The iPhone maker is “looking like the old IBM,” wrote Toni Sacconaghi, an analyst at Bernstein. International Business Machines Corp.‘s “strength in mainframes and associated account control once seemed unassailable,” Sacconaghi noted, warning that “Apple’s key risks are that iPhone is replaced by a new computing/internet access platform.”
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