If you made a small (Romney-sized) $10,000 bet on Apple (AAPL) and Microsoft (MSFT) at the start of the year, you're a winner both ways, but twice as good with AAPL. If you did that a year ago, you're nearly three times better off with Apple. Going back further, it gets worse.
But what investors want to know is, which is the better bet for fast growth today? Which will be a better bet six months from now, a year from now? That's where to put your money today.
There are reasons to now bet on Microsoft. It's now, believe it or not, just half the size of Apple by market cap. It has more room to grow. You're not betting on perfection when you bet on "Mister Softee."
There are reasons to believe that Microsoft finally "gets it" about its past and is prepared to compete on a broad front. Banning the ownership of Apple products by employees is silly, but it at least shows the company takes its relative plight seriously.
Paul Greenberg of ZDNet thinks Microsoft has "made the turn." Its pitch is aimed, not so much at the consumer market as the business market, and it's targeting a broad swath of corporate spending, including shares held now by Oracle (ORCL) and Cisco (CSCO). (Here's the Oracle competition and here's what they have in mind for Cisco.)
As much as Google wants consumer trust, Microsoft wants that of your CIO. Its recent moves against what it calls the "cyber Mafia" (cute name) didn't cost it much, in the grand scheme of things, but they show whose side it's on.
It wants to use this trust to replace RIM in the corporate mobile strategy and to push new standards before the Internet Engineering Task Force, a political struggle with Google (GOOG) that will provide big benefits if it can go Microsoft's way.
A lot of the skepticism concerning Microsoft will, of course, be based on its mobile failures, and whether they can be turned around. Here at Seeking Alpha, Jaded Consumer sees real hope now in China, the most advanced mobile market, while Helix Investment Management says that, given its other successes, mobile doesn't matter. Any gains it can make, in other words, are accretive.
Here is the bottom line. A new version of Windows will accelerate earnings - it always does. Microsoft is advancing across a broad front in a corporate IT market that's growing. If you buy the stock now, you're paying less than 12 times the last year's earnings.
Microsoft doesn't have to beat Apple to out-perform it, in other words. As with the two men being chased by a bear, it just as to beat the guys between it and the bear. Like Cisco and Oracle.
Its chances of doing that are worth buying.