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Apple Inc. (AAPL) and Alibaba Group Holding Ltd (BABA): The Story of Short Term Difference

There’s no particular way to compare two winning strategies in the economic spectrum, however some distinctive traits can be outlined. “Shark Tank” investor Kevin O’Leary of O’Leary Funds spoke on CNBC his vision regarding Alibaba Group Holding Ltd (NYSE:BABA)’s post Initial Public Offering overvaluation and Apple Inc. (NASDAQ:AAPL)’s increasing profitability.

Apple Inc (AAPL) Store, Fifth Avenue, NYC

Alibaba Group Holding Ltd (NYSE:BABA)’s currently trading at little above $90 a share, about 4% less than its Friday closing value. The company’s price is very sensitive to the overall market volatility, because it offers no yields.

“[…] and so if you’re an institution right now, and you want it getting balanced into what would be global internet exposure, global e-commerce, global online financing, you’re going to take a 5% waiting in this name. I think you wait until it trades down into the 80s before you buy any more,” said Kevin O’Leary.

Compared to the e-commerce talent, Apple Inc. (NASDAQ:AAPL)’s fundamentals are more neatly established. Its shares offer a dividend yield, there’s growing interest towards its products and there’s actually little that can get out of control

“I’m fully weighted in Apple. There’s a stock that fits all my metrics. […] They are sold out of the iPhone 6 Plus. There is huge demand. I predict 12 million on the pre-order basis. This is going to accelerate earnings on all of the platforms that they sell into,” commented Kevin O’Leary.

The main difference between these two giants lies in the fact that Apple Inc. (NASDAQ:AAPL)’s a mature company, with more than $600 billion in market capitalization and little potential growth percent-wise, whereas Alibaba Group Holding Ltd (NYSE:BABA) is new to the market, but has a lot of potential growth to its $231 billion value due to the nature of its business. This particular fact can be sensed in the above analysis. Both stocks promise a long term bump in prices, however, the Chinese company will display large fluctuations in the short term, whereas the computer manufacturer’s price will exhibit a more stable growth.

Disclosure: none

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