Consider it a clash of the titans — the world’s biggest publicly traded company (as measured by market cap) versus the web’s most encompassing brand. Apple‘s (NASDAQ:AAPL) market cap last weighed in at $1.4 trillion, sporting trailing 12-month revenue of $268 billion. Google’s parent company Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG) isn’t quite as big or as profitable with a market cap of $1.04 trillion and TTM revenue of $161.9 billion, but the Google logo remains one of the web’s most recognized brands, edging out Apple on that front.
Size isn’t necessarily everything to investors, of course. Apple is bigger, but its profits are also divvied up among more shareholders. Alphabet may have more opportunities for growth. Each company should be weighed on its own merits and prospects.
To that end, if an investor only had room for one name or the other right now in his or her stock portfolio, which would be the better bet?
The case for, and against, Apple
It’s a name that needs no introduction. Apple makes the world’s most popular smartphone and has excelled at extracting revenue from owners of that smartphone.
Its digital services unit, which sells apps and content, grew another 17% last quarter, and while that $12.7 billion worth of services revenue pales in comparison to the $79.1 billion worth of hardware it sold during the same three-month stretch, the hardware segment is still growing too. The services segment’s top line improved 7.7% for the quarter ending in December.
Perhaps most encouraging is that sales of the iPhone, contrary to some analysts’ concerns, haven’t hit a ceiling yet. Although the company doesn’t disclose the exact figures anymore, IDC estimates the company sold 73.8 million iPhones during the last quarter of last year, growing the tally nearly 8%. The feat is even more impressive given the political tensions between the United States and China over the past 18 months, the latter of which is an increasingly important market for Apple.
The market has rewarded this success, as well as all the company’s other 2019 victories leading up to another sensational quarter. As of right now, AAPL shares are higher to the tune of 90% for the past 12 months, with investors unafraid of paying a premium to plug into that growth.
But there’s the rub, so to speak. As impressive as the recent past has been, the foreseeable future isn’t apt to be nearly as impressive.
Rosenblatt Securities analyst Jun Zhang warned investors late last month that “the market has become too enthusiastic about the upcoming 5G cycle,” which has spurred some of the most recent stock speculation from Apple’s bulls.
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