This is a royal battle between the two largest stocks of the S&P 500.
In one corner of the ring, Microsoft continues to hit records; in the other, Apple has not reached a new peak since January.
CNBC “Trading Nation” asked two traders which is the better bet: the champion Microsoft or the recent outsider Apple?
“Depends on what you value more. Do you value … catching up or do you value long-term growth?”
Apple’s return from pandemic lows has been delayed since January. Although it rose 100% from the 52-week low, it fell 10% from its peak on January 25. Shares have fallen nearly 2% this year, although the XLK tech ETF has won 8%.
“Now, if you just look at the net rating, believe it or not, Microsoft doesn’t actually trade as high a premium as Apple, so while Apple is absolutely cheaper, Microsoft is actually cheaper than its own history,” he said. she.
Sanchez said Microsoft traded about 20% above its long-term estimates, high but justified given its outlook for sales growth trends.
JC O’Hara, chief marketing technician at MKM Partners, said Microsoft seems to be the stronger contender here. However, this is not the name he relies on.
“When you look at Apple and Microsoft, they both trade with such a high degree of positive correlation between their price action. So, what makes me think is that Apple may be the best buy deal right now,” he said. “O,” Hara said during the same interview.
Just as Microsoft began to reach new heights last week, O’Hara predicts that Apple will do the same sooner.
“If Apple starts picking up speed and breaking new highs, a lot more eyes will be watching this stock, so we’re not buying leadership, we’re buying lagging behind, we’re buying something that’s slowly starting to improve,” he said.
Disclosure: Lido owns MSFT and AAPL. Sanchez owns MSFT.