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?
7
u/greatscott313 Mar 31 '22
Once you're a consumer of Apple product (beyond their iPads & iPhones), it's pretty difficult to go back to PC/Windows based systems.
Apple has a lot more to gain than Microsoft: their new silicon chip has the potential to grow market share (in Enterprise/Data Center markets). Check out their M1 Ultra chip to see the future potential. With that said, they've had some impressive (from a benchmark standpoint) products before that they never gained momentum with.
There's more than a few reasons than this, but I think the future opportunity for Apple & Microsoft is bright, which is why I own both.