A Motley Fool analyst argues Microsoft is the better value between the two megacaps, pointing to a price-to-earnings ratio he pegs at about 50% cheaper than Apple. The gap holds on forward earnings too, even as both firms face similar bearish cases.
Microsoft trades at a price-to-earnings multiple about 50% cheaper than Apple's, and Motley Fool contributor Keithen Drury reads that as a reason to favor the software maker over the iPhone maker. Writing on the last trading day of the first half of 2026, he frames Microsoft — the fourth-largest company in the world — as one of the biggest bargains in big tech.
The valuation case
Drury leans on the price-to-earnings ratio, the standard yardstick for two mature, profit-heavy businesses. On that measure Microsoft sits low against its own historical levels and is about 50% cheaper than Apple.
The discount does not close when growth is priced in. Both companies run non-traditional fiscal years — Microsoft's ends in June, Apple's in September — so Drury uses fiscal 2027 projections for each. The same gap that shows up on trailing earnings persists on the forward figures, which he reads as a sign the two firms' expected growth rates are broadly similar.
The bearish counterweights
The case against Microsoft is not empty. Drury lists fears of overspending on AI, the risk that AI erodes some of Microsoft's staple software applications, and the company's reliance on its partnership with OpenAI. Yet he argues those concerns carry roughly the same weight as the ones facing Apple, which he notes has spent little on AI and has gone years without a major iPhone revision or new product.
Because the discount holds while the risks look comparable, Drury sees Microsoft as the better-positioned of the pair, with room for its multiple to expand if the market re-rates it higher.
Source: The Motley Fool
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