Amazon lost money for the year and everyone continues to expect it will have very low profits. So, why did Amazon’s stock go up and Apple’s stock go down? Analysts are saying that Apple’s stock price dropped because the company suggested that it won’t keep growing as fast as it has forever.
Full Answer
Is Apple stock better than Amazon stock right now?
From a technical perspective, Apple stock looks much better, up 31% in the last three months and trending higher with almost no interruption since early August. It’s up more than 70% year to date. Amazon stock, meanwhile, has been running in place, up a mere 1% in that same span and trading well below its July peak.
Why is Apple stock so expensive?
Apple stock has risen by more than 58% since the beginning of the year, and in spite of supply constraints due to pandemic-related production delays, the company continues to enjoy impressive results in its products and services segments.
Why is Apple so much more profitable than Amazon?
"Amazon relies on pricing power and scale for its dominant market position, whereas Apple has built a sustainable ecosystem where switching costs become increasingly high," Bilsky says. "Both are great businesses, but I believe Apple's model allows it to have a more predictable revenue stream and ability to increase margins over time."
Is it too late to buy Apple and Amazon stocks?
Investors may have missed getting in on the early rise of Apple ( NASDAQ:AAPL) and Amazon ( NASDAQ:AMZN) stocks, but it's not too late for those who want a piece of the action. Despite their massive size, these two continue to post impressive top-line growth, making their stocks worthy of a closer look.
Why did Apple stock drop so much?
Apple has fallen during a bad week for equity markets, which are selling off stocks in nearly every industry on fears of Fed rate hikes, weakening consumer confidence, rising inflation and global supply chain challenges.
Is Amazon more successful than Apple?
However, Amazon's earnings growth was significantly better; in fact, its EPS was higher than Apple's by a factor of nearly 10-to-1.
Is Apple still a good investment?
The most recent earnings report proved that Apple can still deliver solid growth on top of outstanding results in 2021.
Is Apple under or overvalued?
As of this writing, we think Microsoft's stock is about 23% undervalued, while Apple's stock is 14% overvalued.
What company will overtake Apple?
LONDON (Financial Times) -- Saudi Aramco has overtaken Apple as the world's most valuable company after higher oil prices pushed shares of the world's biggest crude exporter to record levels, while a broader tech stock sell-off weighs on the iPhone maker.
What will Apple be worth in 10 years?
The Bottom Line Assuming 18% compound annual growth over the next decade, your $10,298 investment in Apple would be worth $53,898.
What is the prediction for Apple stock?
Stock Price Forecast The 39 analysts offering 12-month price forecasts for Apple Inc have a median target of 190.00, with a high estimate of 219.94 and a low estimate of 145.00. The median estimate represents a +27.77% increase from the last price of 148.70.
Should you ever sell Apple stock?
Investors should hold off on investing in Apple. Apple's stock valuation is approaching its peak as the underlying market and the economic conditions shift. However, Apple is not a sell because of low interest rates and high inflation, but investors should still be careful.
Is Amazon a buy hold or sell?
Traditionally, investors would look at the stock with the lower P/E and deem it a bargain. But when compared to its growth rate, it does't have the earnings growth to justify its P/E....Momentum Scorecard. More Info.Zacks RankDefinitionAnnualized Return1Strong Buy25.08%2Buy18.56%3Hold10.15%4Sell5.79%2 more rows
Is Apple undervalue?
According to my valuation model, Apple seems to be fairly priced at around 14% below my intrinsic value, which means if you buy Apple today, you'd be paying a reasonable price for it. And if you believe the company's true value is $190.36, then there's not much of an upside to gain from mispricing.
Is Tesla overvalued?
TSLA Stock Is Still a Buy in the Long Term TSLA is still overvalued, at least from a conventional viewpoint. However, there is more to a stock than just its earnings and market cap. TSLA has been fundamentally overvalued for almost a decade, but it has still gone up.
What is a good PE ratio for Apple?
About PE Ratio (TTM) Apple Inc. has a trailing-twelve-months P/E of 23.34X compared to the Computer - Mini computers industry's P/E of 16.30X. Price to Earnings Ratio or P/E is price / earnings. It is the most commonly used metric for determining a company's value relative to its earnings.
Amazon vs Apple Earnings and Stock Prices
One of the latest head scratchers that has everyone talking is what happened with Amazon’s stock price and Apple’s stock price following their earnings announcements and press conferences. A lot of analysts are looking deeply at the numbers, but in this case, they have nothing to do with what is going on with these stock prices over the short-term.
What is a Apple Stock Really Worth?
One of the hardest things for amateur investors to understand is that theoretically, everything that is already known is accounted for in the price of the stock. For example, investors already know that Apple has sold a lot of iPhones. They also already know how much money the company has and how good it is at producing new products.
How does Apple divide its business?
Apple divides its business between products and services. Products include things like the iPhone, iPad and Mac, while the services segment includes the App Store, Apple Music, Apple Pay and, most recently, Apple TV+. Across all of those services and more, Apple had 160 million paid subscribers in the third quarter of 2019.
What is the most important product of Apple?
For Apple, its most important product is the iPhone. The iPhone accounted for 44% of Apple's net sales in the third quarter. With just less than 14% of the global market share, the iPhone is still a dominant smartphone powerhouse despite the fact that sales have been slowly falling over the last few years. Yet all is not lost for Apple, ...
How much of Amazon's sales will be in 2020?
Last quarter, the company reported a 40% year-over-year increase in sales of $88.9 billion as its e-commerce revenue grew a whopping 47.8% thanks to increased demand. A 160% increase in online grocery delivery capacity ...
Is the iPhone still Apple?
Despite that absurd growth, the iPhone is still Apple's bread and butter – yet the importance of services can't be overlooked, as Apple's sticky ecosystem is key to keeping consumers from switching to other smartphones.
Is 5G important for iPhone sales?
It's important for Apple to sustain the iPhone's momentum, and with the rollout of 5G – fifth generation technology – just around the corner, it seems likely that consumer enthusiasm could propel sales even higher.
Is AWS profitable?
AWS provides those companies with cloud services and has continued to enjoy strong demand throughout the pandemic, with revenue in the second quarter growing 29%. Most importantly, AWS is profitable; cloud computing made up 12% of Amazon's total revenue last quarter but accounted for 57% of the company's operating income.
Apple vs. Amazon – Stock Market Returns and Chart
To get a better understanding of how well these stocks have performed over the years let’s first start with the annual returns of both Apple and Amazon stocks.
Growth chart of the two companies in comparison
For the comparison here, I just pulled in Amazon’s stock chart for the past 1 year.
Apple Stock Dividends
If you like getting regular juicy dividends, then Apple’s doing a fairly good job here.
Apple vs. Amazon Net Income Reports
When you look at Apple’s net income report starting from 2005 to the latest Q3 2020, you can see the consistent growth in the net income. The revenue just crossed 20+ Billion for the first time in 2020.
Final Words – Apple or Amazon?
Apple and Amazon are two amazing stocks in the modern world. Holding both of them in your portfolio is not only good but it will be very lucrative over the long term (5-10 years at least).
What is Apple's moat?
Intangible Assets: This includes things like brand value, patents, and regulatory protection. This is Apple's key moat. Its brand is the most valuable in the world , and patents on in-house developed chips are a key differentiator. No moat will ever mean that a business is safe forever.
Is Apple the most valuable company in the world?
It's true , Apple is the largest, most valuable company the world has ever known . With a bump of just 10%, it would become the history's first trillion-dollar organization. But while the law of large numbers does make sense on paper, Apple's not so big compared to its peers that it should necessitate such a discount.
Is Apple too big for its own good?
Apple's simply too big for its own good. Apple isn't growing as fast as the other three. But while these make sense on the surface level, I simply don't think they explain the heart of the matter. There's only one plausible explanation: Apple's moat is nowhere near as wide as those of the other three, and the market knows it.
How does Apple divide its business?
Apple divides its business between products and services. Products include things like the iPhone, iPad and Mac, while the services segment includes the App Store, Apple Music, Apple Pay and, most recently, Apple TV+. Across all of those services and more, Apple had 160 million paid subscribers in the third quarter of 2019.
What is the most important product of Apple?
For Apple, its most important product is the iPhone. The iPhone accounted for 44% of Apple's net sales in the third quarter. With just less than 14% of the global market share, the iPhone is still a dominant smartphone powerhouse despite the fact that sales have been slowly falling over the last few years. Yet all is not lost for Apple, ...
How much of Amazon's sales will be in 2020?
Last quarter, the company reported a 40% year-over-year increase in sales of $88.9 billion as its e-commerce revenue grew a whopping 47.8% thanks to increased demand. A 160% increase in online grocery delivery capacity ...
Is Apple the same as Amazon?
It's impossible to make an exact comparison between Apple and Amazon, but both companies have important portions of their respective businesses that investors need to know more about before making their decision. In fact, Apple and Amazon both have one tried-and-true business segment and one new, fast-growing segment on which their future success depends.
Is AWS profitable?
Most importantly, AWS is profit able; cloud computing made up 12% of Amazon's total revenue last quarter but accounted for 57% of the company's operating income. While revenue growth at AWS has slowed year over year, it will remain a key part of Amazon's overall strategy and the investment thesis for the company.
Is 5G important for iPhone sales?
It's important for Apple to sustain the iPhone's momentum, and with the rollout of 5G -- fifth generation technology -- just around the corner, it seems likely that consumer enthusiasm could propel sales even higher .
Is Amazon ecommerce profitable?
Higher inventory, faster turnaround times and pandemic-related protective gear cost Amazon a lot of money. As a result, e-commerce isn't as profitable as investors would like to think.
When did Amazon's Q2 end?
Note: Amazon's Q2 2020 ended on June 30, 2020. Data from Amazon's Q2 2020 earnings release. Chart by author.
When will Apple's Q3 2020 end?
Note: Apple's Q3-2020 ended on June 27, 2020. Data from Apple's earnings release. Chart by author.
Is Amazon getting a boost?
Amazon is getting a coronavirus boost. Amazon isn't just an e-commerce powerhouse. It's built an incredible cloud technology business called Amazon Web Services (AWS). Today, that segment makes up only 12% of the most recent quarter's revenue, but it makes up most (69%) of its operating income.
Why was Amazon a disaster in 2020?
On the one hand, there is no shortage of corporate suffering, and on the other we have Amazon (NASDAQ: AMZN ). Because of the quarantine, demand for its services exploded. Consequently, while the markets suffered, Amazon stock rallied to new highs. Investors in it are flush with profits and they are not relenting.
Does Amazon run lean on profits?
Amazon runs lean on profits on purpose. That is how they can grow this much and for this long. It’s not a coincidence that they find themselves leading in the areas that matter. Judging its worthiness of investment based on the price-to-earnings ratio is faulty logic.
Is Amazon stock cheaper than Apple?
Amazon stock is 40% cheaper than Apple (NASDAQ: AAPL) and 55% cheaper than Facebook (NASDAQ: FB) from that perspective. They have proven to Wall Street that they can dial up the profits at the drop of a hat. For now they choose to continue pursuing the growth path.
Is AMZN above the March low?
AMZN is about 100% above the March low so clearly the easy short term profits are done. However, it spent the last five months consolidating inside a wide range. The benefit of that is that the bulls get comfortable up at these altitudes. The next new trade is easy.
