In The Race of The Three Horsemen of Tech – Google Inc (GOOG) Is the Clear Leader

Page 1 of 2

In a recent Motley Fool column, Chad Henage explored comparisons between Google Inc (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT). He rightfully points out that Google has a higher price to earnings ratio, and much less cash per share as a percentage of market cap, and no yield as compared with the other two tech behemoths.

There is no doubt that in a blind taste test, Google would be the first stock spit out by the investor. However, these aren’t sodas. To me the question is: is Google Inc (NASDAQ:GOOG) the flavor of the month, or are there real reasons for its higher valuations?

Google Inc (NASDAQ:GOOG)Let’s take a look, and compare these 3 stocks, not only based on valuations which Mr. Henage covered, but in terms of what the company is producing.

Microsoft Corporation

Mister Softy, with the exception of its gaming division, with its X Box and Kinect devices, has really produced nothing which has caught fire in years (Kinect, in all fairness, is uber-cool and novel. The technology will undoubtedly be adapted for things outside of gaming.)

Its tablet offering, Surface, has performed far below expectations which were not high to begin with. In fact, on the street, while I have seen a zillion iPads, a couple of Amazon Kindles, a few Samsung, one other Google Inc (NASDAQ:GOOG) Nexus tablets besides my own; the closest I have come to seeing a Surface tablet in existence is their commercial.
Additionally, Softy’s supposed moat on operating systems is under immense pressure.
I have been a Microsoft loyalist my entire computing life, but, in the last 2 years, have almost fully migrated over to Google. While a year ago I did purchase a new Windows notebook, which I very much like, I find my use and need for it decreasing as I use my Nexus tablet more and more often.
The company is a lumbering giant. Bill Gates spoke of tablet computing years before Apple released the iPad, but Microsoft never created the product.

Their speech recognition software lags far behind Google Inc (NASDAQ:GOOG)’s, and with more and more use of tablets, and Google Chromebooks in direct competition with lower end laptops, the OS moat might be vaporized much more quickly than investors believe possible.

While Windows Office, Microsoft’s other big cash cow moat has some enterprise cushioning, Google Inc (NASDAQ:GOOG) docs are pushing on that door as well.

Apple Inc.

Apple stock has been decimated since the release of the iPhone 5 due to fears of increased competition and the associated margin contraction.
Investors are suddenly fearful that Apple’s miraculous run of revolutionary products might have come to an end, exacerbated by the passing of Steve Jobs. While this may or not be valid, investors should bear in mind that the iPad and iPhone were three years in development each.
The stock has lost over 10 percent in the last 52 weeks while they continue to pile on cash to their balance sheet.
The iPad (and mini) continue to be the world’s best-selling tablets (by far), and with the release of the iPhone 5, Apple has in fact gained market share in the United States.
Unlike Microsoft, Apple’s cool factor is still off the chart with consumers, earned by their combination of artistry and innovation.
Of course, this has attracted intense competition, (as in all good capitalistic systems,) and anticipated price pressures have sent Apple shares spiraling downwards.
One thing is for certain though; Apple’s brand globally remains extremely strong. While their percentage of the pie might decrease, the total pie will increase substantially. I anticipate Apple to release a lower price version of their iPhone to try to gain global market share, especially in developing countries, and get more consumers enmeshed into their ecosystem.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!