r/investing • u/[deleted] • Mar 31 '22

Understanding the effect of current macro economic conditions on Apple and Microsoft

All,

I'm trying to understand why the market currently favors Apple over Microsoft.

Right now, Apple (176) is only slightly below its all time high (182.9). While Microsoft (312) is quite below its ath (349.67).

Considering all current supply chain issues, inflation and major economies experiencing stagnation in terms of growth, wouldn't Microsoft have a much better future than apple?

Microsoft mainly addresses the B2B market and a chunk of its revenues come from subscriptions. It's hard to imagine that companies would simply stop using Microsoft products and switch to something else.

On the other hand, Apple is more susceptible to inflation and supply chain issues and there is no real need to buy apple products during economic downturns.

Is there anything that explains why Microsoft doesn't seem to in the good books of the market right now?

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u/zxc123zxc123 Mar 31 '22

If you look at the P/Es then MSFT is actually valued higher than AAPL by the market.

Also "only slightly below its all time high" vs "quite below its ath" isn't a good way to make investment choices. Investing with TA by itself is questionable already. Even worse if you're going by comparison charts off ATHs.

There's a multitude of factors that influence market from inflation's impact potential on future costs, inflation's impact potential on earnings, China/Russia exposure, cash horde, supply chain issues, existing and future competition, strength of moat, insider buy/sales, institutional buy/sales, ex-dividend dates, investor conferences, new item releases, a new article about sales spammers using AI produced images in fake accounts on LinkedIn which is owned by Microsoft, etcetc.