I think a lot of fund managers and analysts see Microsoft as a less risky bet because because their products are more business-oriented and therefore perceived as less prone to quick customer defection. People keep waiting for Samsung or Google (and previously BlackBerry, Nokia, Microsoft, Motorola, etc.) to come out with an “iPhone killer” that will cause Apple’s profits to collapse, which to them seems more likely than a Windows killer, Office killer or a dramatically more competitive cloud service.
Microsoft gets significantly more revenue from business customers, whereas Apple gets much of their revenue from personal consumers. While Apple does sell into business accounts, it’s mostly for hardware (iPhone, iPad, MacBook), and then business customers tend to load them with non-Apple apps and management products.
Most every business account with MacBooks load them with Microsoft’s Office Suite, or rely on Office 365 subscriptions.
And Apple doesn’t have a business focused product comparable to Azure cloud services.
Is the Apple share drop because they didn’t meet random people’s expectations even though they had another record-breaking quarter?
Funny response: "Random people"? Didn't you know "all people are created EQUAL"?
Serious response: Who exactly are the non-random people who should be allowed to decide what a stock is valued at? This is a serious question, not a rhetorical one.
It's silly to think about 1st and 2nd place at these crazy-high valuations, but I still do wonder why Microsoft is valued that high. Windows11 and Office365 is all I see them having. I guess maybe them being more of a services company now carries more weight?
Of course Apple will be back on top soon. But it is still funny when you consider that maybe 7-9 years ago lots of Apple pundits declared Microsoft to be finished. Allegedly iPads were going to kill of Windows PCs at the low end and the rest would migrate to Macs.
It's silly to think about 1st and 2nd place at these crazy-high valuations, but I still do wonder why Microsoft is valued that high. Windows11 and Office365 is all I see them having. I guess maybe them being more of a services company now carries more weight?
First, Windows 11 alone would make Microsoft a Fortune 500 company. Second, you could take away all of their sales to consumers and they would still be - again - a Fortune 500 company on their enterprise offerings alone just like Oracle, Salesforce etc. And yes, being a services company carries a ton of weight. They had $60 billion in Azure revenue alone in 2020, and Azure is far from their only service.
Is the Apple share drop because they didn’t meet random people’s expectations even though they had another record-breaking quarter?
Random? No.
If you own shares of AAPL either directly or indirectly and you didn’t buy or sell today, you weren’t one of those who sent the share prices down.
The people who sent the share price down were today’s buyers and sellers. Some sellers offered some of their shares and today’s buyers didn’t want to pay yesterday’s prices. Some of those sellers decided to accept lower bids. It’s called a free market economy.
They aren’t random people. They are both institutional investors as well as retail investors. They all have tax IDs. The SEC knows exactly who these parties are and so will the IRS eventually. It’s not just Jimmy Fanboy Investor on AppleInsider, it’s more like some fund manager at FMR or someone who manages the pension fund of your state’s teachers union, hedge fund managers.
While the stock market will punish companies (and not just Apple) for missing expectations, the market is mostly forward looking. The market is also unhappy when the company withholds forward guidance.
Apple hasn’t offered guidance since the pandemic began and today’s market reaction was predictable.
Not agree, because all the people you’re talking about, are following the advices of really random people: so called “analysts”, the “best” of which are working for Wall Street.
By predicting unrealistic high expectations, they are creating negativity around Apple, even when Apple breaks its own quarterly revenue records
LOL, you REALLY don't get it.
Just because you read something on the Internet doesn't means it's gospel.
Just because some analyst writes a research note doesn't mean you need to follow what they recommend.
Did you do everything your mom told you to do? If you say yes, you're a liar.
I doubt if any major fund or pension manager really gives a s--t about what sort of nonsense G.M., K.H. or anyone else spouts. They will have their own analyses.
Remember, a lot of these analysts have long track records of BEING COMPLETELY WRONG.
And I will point out that Apple actually met or exceeded many predictions. Apple had great gross margin.
The market punished Apple for withholding guidance.
If Apple didn't want their corporate performance to be judged by investors, well maybe they should have thought twice before IPO-ing in 1980. No one is preventing Apple from reprivatizing the company.
Why?! What new innovation did they come up with, copying macOS and calling it Windows 11?
Microsoft earns very little from Windows. It’s making most of its money from cloud services where, despite being behind Amazon in terms of market-share, make more from than AWS. This is in part because Microsoft targets the more lucrative and easy customer lock-in platform services with Azure. Once you adopt Azure’s platform services you’re at Microsoft’s mercy with regards pricing etc. Too many non-technical CTOs have just gone with Microsoft Azure without thinking through the long term costs.
Why?! What new innovation did they come up with, copying macOS and calling it Windows 11?
Microsoft's resurgence is in its Azure cloud business. It's really a remarkable turnaround for a company that not that long ago was wondering how to respond from pressures on it's bread and butter Windows Server business.
Market valuations make no sense. How can Microsoft be worth more than Apple when they consistently make a fraction of what Apple does both in terms of total revenue and net profit?
Most tech valuations are based not so much on current income of companies, but expectations of growth in future income.
Market capitalization. Please learn financial terms. I work in financial IT sector.
Why?! What new innovation did they come up with, copying macOS and calling it Windows 11?
Microsoft's resurgence is in its Azure cloud business. It's really a remarkable turnaround for a company that not that long ago was wondering how to respond from pressures on it's bread and butter Windows Server business.
True. And Apple should start thinking about closed iCloud ecosystem if it is still success to continue. Azure is far more accessible and there are alternatives with Google and Amazon that can be set up regardless of hardware or system. For example you can have life backups on Amazon Glacier while running storage on Synology (Linux based) that works with any client OS (except only when Apple may restrict with mobile devices, but macOS works as well). There is more, but too long to mention.
Market valuations make no sense. How can Microsoft be worth more than Apple when they consistently make a fraction of what Apple does both in terms of total revenue and net profit?
Investors are weenies.
Right. That is why people forget that in Steve Jobs he was main share holder/investor at Apple taking $1 salary living off shares and there was no dividends paid to investors, but capital growth. That time Microsoft was based only on dividends and random successes for 15 minutes that brought them down on knees as quarterly profits were the key (not long term capital build).
This is a temporary hiccup due COVID related supply constraints. Apple is expanding and diversifying, Microsoft is maintaining.
Yes because Microsoft was not impacted by COVID magically. Right...
Microsoft was simply smarter not to push business into hardware entirely just like Apple that is hardware company mainly. What worked in mobile era boom does not work always. We will see after COVID where market saturated and if mobile devices start being like desktop computer these days. You still cannot perform any productive work in most of industries using small mobile devices. They are just auxiliary tool for the main job (communications with people) or simply a fancy toy.
Why?! What new innovation did they come up with, copying macOS and calling it Windows 11?
Why would Windows - the #1 PC OS by a mile - need to copy macOS, now the #3 PC OS? You can't be serious.
Back when Windows was first introduced, in 1985, to replace MSDOS, it was a blatant rip-off of the MacOS of the time. There was a lawyer feast and eventually Apple and Microsoft reached an settlement. When Microsoft did it, "they need(ed) to copy macOS"
Is the Apple share drop because they didn’t meet random people’s expectations even though they had another record-breaking quarter?
Random? No.
If you own shares of AAPL either directly or indirectly and you didn’t buy or sell today, you weren’t one of those who sent the share prices down.
The people who sent the share price down were today’s buyers and sellers. Some sellers offered some of their shares and today’s buyers didn’t want to pay yesterday’s prices. Some of those sellers decided to accept lower bids. It’s called a free market economy.
They aren’t random people. They are both institutional investors as well as retail investors. They all have tax IDs. The SEC knows exactly who these parties are and so will the IRS eventually. It’s not just Jimmy Fanboy Investor on AppleInsider, it’s more like some fund manager at FMR or someone who manages the pension fund of your state’s teachers union, hedge fund managers.
While the stock market will punish companies (and not just Apple) for missing expectations, the market is mostly forward looking. The market is also unhappy when the company withholds forward guidance.
Apple hasn’t offered guidance since the pandemic began and today’s market reaction was predictable.
Google has never offered guidance. Hasn't hurt them.
Comments
Serious response: Who exactly are the non-random people who should be allowed to decide what a stock is valued at? This is a serious question, not a rhetorical one.
Maybe the stare of the regs will be slightly diverted towards MS?
Just because you read something on the Internet doesn't means it's gospel.
Just because some analyst writes a research note doesn't mean you need to follow what they recommend.
Did you do everything your mom told you to do? If you say yes, you're a liar.
I doubt if any major fund or pension manager really gives a s--t about what sort of nonsense G.M., K.H. or anyone else spouts. They will have their own analyses.
Remember, a lot of these analysts have long track records of BEING COMPLETELY WRONG.
And I will point out that Apple actually met or exceeded many predictions. Apple had great gross margin.
The market punished Apple for withholding guidance.
If Apple didn't want their corporate performance to be judged by investors, well maybe they should have thought twice before IPO-ing in 1980. No one is preventing Apple from reprivatizing the company.
This is in part because Microsoft targets the more lucrative and easy customer lock-in platform services with Azure. Once you adopt Azure’s platform services you’re at Microsoft’s mercy with regards pricing etc. Too many non-technical CTOs have just gone with Microsoft Azure without thinking through the long term costs.
Right. That is why people forget that in Steve Jobs he was main share holder/investor at Apple taking $1 salary living off shares and there was no dividends paid to investors, but capital growth. That time Microsoft was based only on dividends and random successes for 15 minutes that brought them down on knees as quarterly profits were the key (not long term capital build).
Microsoft was simply smarter not to push business into hardware entirely just like Apple that is hardware company mainly. What worked in mobile era boom does not work always. We will see after COVID where market saturated and if mobile devices start being like desktop computer these days. You still cannot perform any productive work in most of industries using small mobile devices. They are just auxiliary tool for the main job (communications with people) or simply a fancy toy.