Apple vs. Microsoft: Which Stock Is the Smarter Buy Now?

Apple vs Microsoft is the question a lot of investors are actually asking themselves this month, and it’s not hard to see why. Both Magnificent Seven giants turned in blowout summer earnings within a day of each other, and the Apple vs Microsoft stock comparison has gotten a lot more interesting because of it. Apple’s iPhone 17 supercycle helped push the company to a record June quarter, while Microsoft’s Azure business crossed $100 billion in annual revenue for the first time ever. So, at the time of writing, is Apple stock a smart buy at a 37 P/E, is Microsoft stock a buy at a cheaper 27 P/E, and which one is really the best Magnificent Seven stock to own going into 2027?

Apple vs Microsoft Stock: Which Is the Best Magnificent Seven Buy?

Apple’s Case In The Apple Vs Microsoft Debate

Apple’s fiscal third-quarter revenue reached $109.4 billion, up 16.4% year over year, and an iPhone number that stood out was the 22% jump to $54.3 billion. Mac revenue also climbed 29%, and Services hit a new record too. Outgoing CEO Tim Cook, on what turned out to be his final earnings call before John Ternus stepped in as CEO on September 1, addressed some of the pressure sitting behind that beat.

Tim Cook had this to say:

“We were able to achieve this despite supply constraints and sequential foreign exchange headwinds.”

An interesting wrinkle here is that roughly two points of gross margin came from one-time tariff refunds, so the underlying growth is a bit thinner than the headline suggests. Memory chip costs are also being squeezed hard enough that Apple has already raised prices on some products. With Apple stock up nearly 45% over the past year and trading at around 37 times earnings, there’s not much room left for a stumble, and that premium is honestly the biggest risk to the whole idea of Apple stock as a smart buy right now.

Microsoft’s Case In The Apple Vs Microsoft Debate

Microsoft’s fiscal fourth-quarter revenue hit $90 billion, up 18%, and Azure grew 43% while also crossing $100 billion in annual revenue for the first time. That’s the other half of the Apple vs Microsoft comparison working in Microsoft’s favor. Commercial bookings surged 84% to $678 billion, and Copilot passed 30 million paid seats along the way. CFO Amy Hood addressed the capacity crunch sitting behind that growth pretty directly on the call:

“Demand continues to exceed available supply.”

That kind of backlog gives Microsoft an unusually clear view into future earnings, though it isn’t cheap to build. Capital spending jumped almost 80% to $116 billion for the year, and free cash flow fell 23% last quarter as a result. Microsoft stock, meanwhile, is up only about 3% year to date and trades at a cheaper 27 times earnings, and that gap is really what keeps the case for Microsoft stock as a buy intact heading into fiscal 2027. A few analysts are already calling it the best Magnificent Seven stock to own from here.

Apple Vs Microsoft Stock: The Verdict On The Best Magnificent Seven Buy

Weighing Apple stock as a smart buy against Microsoft stock as a buy really comes down to what an investor is willing to pay for. Apple’s premium multiple is covering a quarter that refunds partly lifted, plus a memory cost headwind that’s still building up. Microsoft’s cheaper multiple, on the other hand, draws support from a $678 billion backlog and a cloud business that’s still compounding at double digit rates. The numbers back that up. Price targets published this week put Apple near $374, implying about 12% upside, and Microsoft near $601, implying close to 19% upside.

In the Apple vs Microsoft stock debate, Apple still wins on brand loyalty and buybacks, but Microsoft currently offers the cleaner, better documented path to enterprise AI revenue, and that’s really what makes it the best Magnificent Seven stock for investors who care about visible earnings power right now.