It is a battle king between the two largest S&P 500 shares.
In one corner of the ring, Microsoft continues to beat records; in the other, Apple has not reached a new height since January.
CNBC’s “Trading Nation” asked two traders what the best option is: champion Microsoft or recently underdog Apple?
“It depends on what you value more. Do you value … acquisition or do you value long-term growth?”
Apple’s comeback from the pandemic’s decline has slowed since January. While it was up 100% from a 52-week low, it has fallen 10% since January 25th. The stock is down almost 2% this year, as the XLK tech ETF has gained 8%.
“Now if you look at pure valuation, believe it or not, Microsoft is actually not trading at as high a premium as Apple is, so even though Apple is certainly cheaper, Microsoft is actually cheaper in terms of its own history,” she said. .
Sanchez said Microsoft is trading around 20% above its long-term valuations, high but justified given its outlook for sales trend.
JC O’Hara, chief technology officer at MKM Partners, said that Microsoft seems to be the strongest competitor here. However, that is not the name he is betting on.
“When you look at Apple and you look at Microsoft, they both deal with such a high degree of positive correlation between their price actions. So what makes me think here is that Apple may be the best deal to buy right now,” O Said Hara during the same interview.
Just as Microsoft began to break new ground last week, O’Hara predicts that Apple will do the same soon.
“If Apple starts to build momentum and break new heights, many more eyes will look at this stock, so we do not buy leadership, we buy a hanging, we buy something that is slowly starting to get better,” he said.
Information: Lido owns MSFT and AAPL. Sanchez has MSFT.