Handelsblatt

Apple vs. Microsoft: A Financial Comparison

An Updated Comparison After the First Half of 2021

Introduction

Apple and Microsoft have been two of the most successful companies in the tech industry for decades. Both companies have seen their share prices soar in recent years, but which one is the better investment? In this article, we'll compare the financial performance of Apple and Microsoft to see which company is the better long-term investment.

Financial Performance

Apple and Microsoft are both very profitable companies. In the first half of 2021, Apple reported revenue of $217.4 billion and net income of $64.5 billion. Microsoft reported revenue of $234.7 billion and net income of $50.8 billion. This means that Apple is the more profitable company on a absolute basis, but Microsoft is more profitable on a relative basis.

Revenue Growth

Apple's revenue has grown steadily in recent years, but Microsoft's revenue has grown even faster. In the first half of 2021, Apple's revenue grew by 21% year-over-year, while Microsoft's revenue grew by 24% year-over-year. This suggests that Microsoft is gaining market share on Apple.

Earnings Per Share

Apple's earnings per share (EPS) have also grown steadily in recent years, but Microsoft's EPS has grown even faster. In the first half of 2021, Apple's EPS grew by 26% year-over-year, while Microsoft's EPS grew by 33% year-over-year. This suggests that Microsoft is creating more value for its shareholders than Apple is.

Valuation

Apple and Microsoft are both valued at over $2 trillion. However, Apple is the more expensive stock on a price-to-earnings ratio (P/E) basis. Apple's P/E ratio is 27, while Microsoft's P/E ratio is 24. This means that Apple's stock is more expensive than Microsoft's stock, even though Microsoft is growing faster.

Conclusion

Based on the financial performance of Apple and Microsoft, it is clear that Microsoft is the better long-term investment. Microsoft is growing faster than Apple, and it is creating more value for its shareholders. While Apple is still a great company, Microsoft is the better choice for investors looking for growth.

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