Discussion in 'The Lounge' started by Sypher, May 27, 2010.
Apple passes Microsoft to be biggest tech company
At the moment, Apple's shares are worth a couple dollars more than Microsoft's, but the latter is a larger company, with far higher sales and profits. To me, that means that Microsoft is still the biggest tech company.
Apple is not the biggest tech company, that's a misleading statement.
Apple has the highest market cap -- it is the 'most valuable', according to the market. However, it is trading at a substantially higher multiple (EPS) compared to Microsoft, and MSFT still has greater revenue and profit -- substantially so.
I'm honestly not sure why APL is trading at such a high multiple -- it seems like it would be a good idea to short them soon, since it's likely to burst. I suppose it's largely because, IIRC from the last time I looked at their stock, apple's profits largely come from the iphone now and not the computer industry, it's possible that the phone industry trades at a higher multiple than the computer industry.
If Apple or Microsoft and ALL of their related products suddenly vanished today... Microsoft's disappearance would do MUCH more damage than Apple. So to me... Microsoft in that sense is far more valuable than Apple. Microsoft's Windows product alone is used essentially everywhere.
New King of Technology - Apple Overtakes Microsoft - NYTimes.com
Already posted. Mods, please merge this one with the other one.
Apple isn't really a software company. They sell hardware with their OS on top of it.
Simply taking into account revenue is not enough to judge a technology company. They are two different beasts. Apple is a hardware company - itunes the exception, they just sell some one else's goods, while Microsoft is purely software based.
The issue with this argument is that while software is higher margin, hardware is higher revenue per unit. This argues that MSFT has substantially more uptake -- which I think is generally true.
Again, the measure they're using is market cap, which is just shares * share price. There are a lot of factors that go into determining share price. The reality is that MSFT is still the top dog in the tech business. For example, if they wanted to leverage a buyout of another company, they would have substantially more ability to do so because of their superior revenue / profits, and an easier time getting loans as a result.
And so forth...
And if anyone hasn't noticed, microsoft has the cap lead again. Also, anyone who knows trading knows microsoft is undervalued while apple is massively inflated.
That's the very definition of worst case vs best case scenario.
Tapatalk. Samsung Moment. Yep.
What goes up has got to fall..
I think the biggest question is how long can apple remain "cool"..
whats cool sells..
Google is saying APL has 230B to MSFTs 228B. Was that way all yesterday, too.
But, like I said.. short apple. It's trading at a crazy multiple compared to the sector. The only way they get away with it is if they launch some new products that analysts predict massive uptake of at their conference in 2(?) weeks.
Market penetration is what's key to judging adoption. Apple has what, 5-7% in the O.S. sector? Not exactly a leader. You need to compare apples to apples (no pun intended). In the MP3 market? Maybe. In the PC market? You're joking, right?
Gaming saturation? Non-existent. Phone market? It's got a good share, but the Blackberries blow them out of the water. Media player market? Hard to say with all the variants out there these days. Entertainment distribution? With all that proprietary crap and DRM they got going on? No thank you.
So maybe a leader in the stock market, but not much else happening over there.
Well the numbers are constantly in flux, and being that close to each other they are bound to trade spots here and there. But since this is market cap, its not a real indication of what the companies are really worth.
Tapatalk. Samsung Moment. Yep.
Apple isn't even a hardware company the iphone for example uses mostly Samsung tech.
Apple is more like a Marketing Company that happens to sell Electronics.
I don't know stocks very well but is the net worth determined by what Wall Street believes it is worth?
Partly, but of that ~$250/share stock price, Apple has $50/share "in cash". Not to many companies can say that. Their P/E ratio is only 24, and there forward P/E is only 16...with the iPad selling out and people destined to by apps, they are creating another decent revenue stream to "increase" revenue growth. "iPod" sales have remained consistent year over year, and "if" Verizon gets the iPhone, there is no reason to "short" the stock. Espcially given the intrest/sales of Apple products in China. There is also a lot of "corporate" interest in integrating the iPad into firm's infrastructure (finance, insurance, medical, tech firms).
That said, I have no interest in buying "any" Apple products...I would buy some options though.
Essentially. It's determined by the number of shares times the value per share.
Generally, companies trade at a multiple of their earnings. Generally, the multiple that a sector trades at is the same across all companies unless one has a specific thing that makes them different from the rest of the sector. (for example, some drug companies trade at different multiples because of the kinds of drugs, patent status, exposure to different payment systems (medicaid, etc)).
Tech firms, IIRC, trade at ~12x earning usually. That's where MSFT is. AAPL is substantially higher. Barclays believes MSFT should be valued consider to $32/share, it's at $26 now -- go figure. Barclays also targets $315 (currently 260) for AAPL. So they seem to agree w/ the mkt that apple should be at a higher multiple.
It seems like based on current data, they're seeing the iPAD demolishing the netbook market (~155k less sold in april than march; ~5% y/y decline in sales), while they've noticed a strong growth of the macbook market (probably driven by the launch of the new macbook). So it seems like the ipad is taking away from competitors and driving substantial new revenue -- predictions range from 1M-2.5M ipad sales this quarter. That's what, 1-2B more revenue? Pretty substantial growth.
That's a ton of cash floating around. Are they looking at acquisitions?
iTouch sales have decreased y/y -- probably ipad cannibalization. VZW getting the iphone isn't why you short it -- you short it because it's trading at such a high multiple and expect it to crash some as a result.
My point was that with the overall outlook for Apple, discounting global eco/political issues, there is no reason to short Apple right now. It will see $300 before it sees $200..."especially" if VZ gets the iPhone. Recent reports were that the "regular iPod" sales were just as strong this year as last, if not a slight "increase". Bottom line, Apple is firing on all cylinders (forgot to mention that notebook sales were stronger as you mentioned).
I'm not sure about any M&A, I never knew Apple to be big into that like MSFT, CSCO, or EMC...they may be, but like I said, I have little to no interest in Apple products. I do think that eventually high schools, or more likely universities, will eventually adopt them as textbook replacements, etc.
I'd short it on the assumption that the WDC won't result in a VZW iphone announcement and the stock will fall as a result -- not assuming the stock would fall 20%+.
I also think that there's a chance we see more corporate or school adoption of apple products -- but we'll see.
I think more of the Wall St. focus is on iPad sales, and subsequent app sales, along with the growing iPhone sales from the growing middle class in developing nations, and China. The iPhone on Verizon, is just icing on top of the cherry, that's on top of the icing on the cake.
Just to put it in perspective...based on market cap, Apple is even bigger than Walmart...that's kind of unreal to me...a company that employs more than a million people worldwide vs Apple? Based on PE and PEG though Apple doesn't seem all that inflated...maybe iphone is selling like toilet paper
I dunno. I just see wall street wanting apple to trade at 17x projected EPS and it feels like we're just looking for a stock crash.
Especially since most tech stocks top out at 12.
But hey, I don't trade the tech industry.
Apple up $3.75 today, with the S&P down 13, going into a holiday weekend, w/the whole Euro thing going on. Price has been holding up pretty well with all the down days lately. Just got (2) upgrades to $325 today. If not for Greece, there is no way it would not be over $280 now.
Fundamentally, there is no reason to believe they will not meed/exceed earnings estimates...again, discounting all the craziness going on in the world.