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Apple and Microsoft are definitely the two heavyweights in the room when it comes to market capitalization, which is a common way to value companies. Currently, they are the two largest companies in the entire S&P 500 index. Together they comprise a whopping 12.75% of the entire 500-stock index just by themselves.

Clearly, this means that both stocks have been outperforming. But which has had the better run over the past decade, and how has each stock reacted to the booms and busts in both the tech world and the overall economy? Here’s a closer look at numbers behind the Apple versus Microsoft battle for dominance, with data provided by PortfoliosLab.¹

• Apple 10-year performance: 599.84%
• Microsoft 10-year performance: 965.02%

The past decade has been important for both stocks, as Microsoft and Apple have been at the forefront of emerging tech trends like cloud computing and AI. Microsoft had the edge over Apple for the first five years of the decade, more than doubling Apple’s returns from 2015-2020, but Apple has been playing catch-up since. Over the past five years, Apple has actually topped Microsoft, by a margin of 198.81% to 145.20%. However, it hasn’t been enough to catch up with Microsoft’s dominance over the first five years of the decade.

• Apple performance since the pandemic low of April 7, 2020: 214.72%
• Microsoft performance since the pandemic low of April 7, 2020: 148.23%

Part of the reason that Apple has outperformed Microsoft for the overall 2020-2025 period is that Apple bounced back much better from the coronavirus pandemic selloff. Microsoft owned the first half of the decade due to its growth from cloud computing, but Apple picked up the mantle after the pandemic due to the burgeoning AI revolution.

When it comes to factors like market cap, price-to-earnings ratio, price-to-earnings-growth ratio and even gross profit, these two companies couldn’t be more similar, which perhaps helps explain their relatively similar overall performance:

• Market cap: Apple $2.99 trillion, Microsoft $2.90 trillion
• P/E ratio: Apple 31.53x, Microsoft 31.44x
• P/E/G ratio: Apple 1.85x, Microsoft 1.79x
• Gross profit: Apple $141.83 billion, Microsoft $138.63 billion

So where do we go from here? Who will win the battle to top the S&P 500 in market value over the coming year? While other competitors like Nvidia may very well end up topping the charts, here’s how analysts see the Apple versus Microsoft battle playing out, according to data from CNN:

• Consensus 12-month price target for Apple: $250
• Potential 12-month gain: 26%
• Consensus 12-month price target for Microsoft: $500
• Potential 12-month gain: 29%

Even in terms of a one-year price target, Apple and Microsoft are neck-and-neck in the opinion of analysts. 

There’s a reason why Apple and Microsoft are the two largest companies in the S&P 500 index — they’re both very good at what they do. For decades now, both companies have continued to innovate, often in unexpected ways, and they’re reinvented themselves time and time again. As the new AI age unfolds, you can expect both of these companies to participate in a major way. 

Sources

1. Portfolios Lab, “AAPL vs. MSFT.” ↩︎