It’s a royal battle between the two largest S&P 500 shares.
In one corner of the ring, Microsoft continues to touch records; In the other, Apple did not reach a new high since January.
CNBC’s “Trading Nation” asked two traders what the best bet was: the Microsoft champion or the recent Apple underdog?
“It depends on what you value most. Do you appreciate … recovery or do you appreciate long-term growth?” Gina Sanchez, CEO of Chantico Global and chief market strategist at Lido Advisors, said on Thursday.
Apple’s recovery from pandemic lows has slowed since January. Although it increased by 100% compared to the 52-week low, it decreased by 10% compared to the January 25 high. Shares have fallen by almost 2% this year, even though the XLK technology ETF has gained 8%.
“Now, if you just look at a pure valuation, believe it or not, Microsoft doesn’t trade at a premium as high as Apple, so even if Apple is absolutely cheaper, Microsoft is actually cheaper than its own. its history, ”she said. .
Sanchez said Microsoft is trading about 20 percent higher than its long-term, high but justified valuations given its outlook for 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 you look at Microsoft, they both trade with such a high degree of positive correlation between their price action. So what makes me believe here is that Apple might be the best deal to buy. right now, “O ‘Hara said during the same interview.
As Microsoft began to appear at new highs last week, O’Hara predicts that Apple will do the same soon.
“If Apple starts to grow momentum and break new highs, there will be many more eyes that will follow these actions, so we don’t buy leadership, we buy a retard, we buy something that is slowly starting to improve,” he said.
Disclosure: Lido owns MSFT and AAPL. Sanchez owns MSFT.
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