Apple (AAPL) and Alphabet (GOOGL) are two renowned names all over the world in the tech industry. There is a great rivalry between these trillion-dollar tech giants as both are giving their best shot to innovate as well as to expand their network in the globe through their products and services.No doubt both companies have brought massive returns to their long-term investors and will continue the trend in the future.
Generally, it becomes difficult to decide the best stock between the two when both tend to keep winning but a deep understanding of the company’s infrastructure, strategies, and developments helps investors to determine which stock is better to add to their portfolio. Let’s look at both stocks to determine which will be the best bet for you in the future.
Apple (AAPL):
Apple (AAPL) Inc. is an American multinational technology company that works on products and services related to computer hardware, computer software, consumer electronics, cloud computing, fintech, and artificial intelligence. The stock price has surged about 460% with an increase in revenue from $215.6 billion to 274.5 billion over the past five years. The net income grew to $57.4 billion from $47.5 billion in the same tenure.
Despite the Corona Virus pandemic, the company’s revenue growth and gross margin from its products remained stable mainly due to its multiple innovative electronic products including Macs, iPhones, iPads Apple watches, Apple TVs, etc. Besides its products, Apple is growing its ecosystem day by day as 20% of revenue was generated from its online services and now it has more than 600 million paid subscribers from all over the world.
The iPhone 12 series which is the first iPhone series to support the 5G technology could add more hype in the future as rough estimates from its suppliers suggest that it could ship 230 million iPhones in 2021. Moreover, Apple will repeat its innovation strategy by launching new versions of its other hardware products. The company is also working on an augmented reality headset which is expected to launch in the next year followed by a pair of AR glasses in 2023.
Apple’s not done yet as the tech giant has also been working on the development of electric vehicles.Analysts suggest that Apple will launch its car between 2024 to 2026 and if it happens,it will be a game-changer for the tech giant, but some analysts think that Apple will have to face great competition in the automobile industry.
Alphabet(GOOGL):
Google is an American multinationalconglomerate company that provides internet-related services and products which include search engine, cloud computing, artificial intelligence, online advertising computer software, and hardware, etc. The investors enjoyed the massive return in the past and hoping to get more profits from the company in the future.
There is no doubt that Google is leading over the internet as its search engine has a 90% market share which is about 89% ahead of the secondly ranked Bing. The company has generated 80% of its total sales with $147 billion in revenue in the past year through online advertising services. The company’s leadership is making serious efforts to innovate its services and products and to evolve Google into digital. Google has launched many professional certificate training programs to diversify its ecosystem.
Google Cloud Platform is the strong competitor of Amazon Web Services and Microsoft Azure now it is ranked third among public cloud service providers. With the evolution of Big Data, the demand for the cloud is increasing day by the day so we can expect that Google will likely generate handsome profit through its cloud services.
Another important thing to notice about Alphabet as it never pays dividend rather it returns money to its shareholders via a share buyback. Management believes that share buyback is the tax-efficient process to return cash to the shareholders and it is more beneficial for the shareholder to retain and use the earnings for future business growth.
Conclusion:
Both tech giants are evolving rapidly and have enough cash in their balance sheets. It is for sure that investors of both companies would be happy in the decade from now, but Apple is the favorite between these two due to its launching iPhone 12 series, AR headsets with AR glasses, and EV car that would prove to be the gamechanger for the stock. On the other hand, Alphabet is facing great competition in online advertising from Facebook.It has shown much growth in cloud services last year but still, it’s a small segment in Alphabet and requires significant effort to compete with AWS and Azure.
