The Ghost Train
THE FINANCE GHOST: Are buybacks core to Apple’s growth?
At the moment, Apple’s share is dramatically outpacing Microsoft’s — but given differing strategies at the two tech giants, that’s unlikely to last
As the dust settles on a week of technology earnings in the US, there’s a dislocation I find hard to ignore. In the past 12 months, Apple’s share price is up 27% and Microsoft is flat. The outperformance began in mid-2024 when Apple pulled ahead and stayed ahead. Still, the share prices were strongly correlated, despite Apple maintaining the gap. Then, in a week when strong questions were asked about AI based on the emergence of DeepSeek, the market dumped Microsoft (down 2%) and dived into Apple (up 4.6%) — a notable shift into negative correlation. Is this justified, or could we see it reverse?
Diving into the Microsoft side of that equation is a separate analysis that needs to focus on Microsoft’s response to AI and the level of investment that has gone into data centres. The TL;DR is that the market is worried that Microsoft has sunk a fortune into technology that might be getting cheaper at a rapid rate. This suggests concerns about near-term earnings, as few would ...
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