It’s a real battle between the two biggest stocks in the S&P 500.
In one corner of the ring, Microsoft continues to record records; on the other, Apple has not reached a new high since January.
CNBC’s “Trading Nation” asked two traders what the best bet was: the champion of Microsoft or the recent deputy director of Apple?
“It depends on what you value most. Do you value … recovering or valuing long-term growth?” Gina Sanchez, CEO of Chantico Global and chief market strategist at Lido Advisors, said Thursday.
Apple’s return to pandemics has slowed since January. While it has risen 100% from the 52-week low, it has fallen 10% from the January 25 high. Shares have fallen nearly 2% this year, although the XLK technology ETF has gained 8%.
“Now, if we look at a pure valuation, believe it or not, Microsoft is not trading at a premium as high as Apple, so while Apple is absolutely cheaper, Microsoft is actually cheaper relative to their own story, ”he said. .
Sanchez said Microsoft is trading around 20% above its long-term valuations, high but justified given its outlook on its sales growth trends.
JC O’Hara, chief market technician at MKM Partners, said Microsoft seems to be the strongest candidate here. However, this is not the name he is betting on.
“When you look at Apple and look at Microsoft, they both operate with a high degree of positive correlation between their price action. So what makes me think here is that Apple could be the best trade right now,” O ‘Va said Hara during the same interview.
Just as Microsoft last week began reaching new highs, O’Hara predicts that Apple will do the same soon.
“If Apple starts to increase momentum and break new highs, there will be many more eyes looking at these actions, so we don’t buy leadership, we buy lag, we buy something that is slowly starting to improve,” he said.
Disclosure: Lido owns MSFT and AAPL. Sanchez is the owner of MSFT.
Exemption from liability