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Biggest reason for this is that Wall Street has noticed the huge cash pile that Apple is just sitting on. A good chunk of their market cap is made up of this ca

Biggest reason for this is that Wall Street has noticed the huge cash pile that Apple is just sitting on. A good chunk of their market cap is made up of this cash pile that they are reinvesting through their hedge fund. There's a reason why Amazon keeps going up even though they are barely profitable. Amazon keeps reinvesting their profits into the company's R&D rather than throwing it in the bank.

scarmig 14y ago
Interesting chance for a HN gut check: If you were offered $100k of Apple or $100k of Amazon right now, which would you choose? You would have to receive and hold for 10 years. To me, the answer to that is obvious (AMZN), but I'm curious if my intuition matches up with the general opinion. I'm not sure which would be a better sign. ETA: Original intent was to talk about 100k in dollars, not in shares.
- aristidb 14y ago
  Are you consciously taking the valuation of the stock into account?
- X-Istence 14y ago
  I would pick Apple. I have a feeling that in 10 years they will have re-invented themselves and be making huge profits, and paying dividends on those shares. For example, 100k of Apple shares today will net me 265,000 USD. Assume that I decide to just pocket that money ... I could live off that for a full year, easy. They pay that every quarter (or at least that's the case at the moment). I'll make money now, be able to stick it into a savings account or re-invest it into other stocks. If you gave me 100k in Amazon i'd be grateful, but keeping it for 10 years means that in the mean time it is useless to me. No dividends, trading at an excess that is absolutely insane, it will come crashing down eventually. Apple at least at that point has cash to continue operations, Amazon doesn't.
  - seiji 14y ago
    Your math looks off. 100k = 100,000. 100,000 * (currently) $514 = $51 million USD. You certainly could live off that for a year. On second look, you are talking about dividends.
  - ScottBurson 14y ago
    I think the parent's intent was $100k worth of each, not 100k shares.
    - X-Istence 14y ago
      I'd still pick AAPL.
- yannickt 14y ago
  I would probably go with AAPL. AMZN is currently trading at over 3,000 times earnings; their forward P/E is in the 150 range. They are mainly an online retailer, and retail and high profit margins usually don't go hand in hand. I expect them to grow, but it's hard for me to imagine a plausible scenario in which their growth matches their current valuation. Also, Apple pays dividends, and they have enough cash to operate for 1-5 years on zero sales. They are better positioned (IMO) to reinvent themselves without being rushed, and at the same time minimize the potential negative impact of that reinvention to their shareholders.
- vosper 14y ago
  I would also take Amazon - although they're huge they don't yet deliver everything you can buy (think groceries) and they have other services like AWS and Mechanical Turk that are growing and are without peer in their markets. As for Apple, I think they will have a harder time staying at the forefront in a very competitive market now that the iPhone and (to a lesser extent) iPad are no longer have the "wow" factor that they used to.
- gojomo 14y ago
  Can I take 80K AAPL, 20K AMZN (the rough proportion of their market-caps)? I want the 100K, but don't feel any need to prove I can beat the market in such massively-held stocks.
- Steko 14y ago
  Strange I think AAPL is the incredibly obvious choice here. If Amazon grows their revenue at 40% every year (like they did in 2011) and manages a 3.5% margin (which they did for years although lower at the moment) then they will start seeing profits like AAPL's 2012 around 2021. Meanwhile if AAPL grows at only 15% a year (and the trend is currently much higher) their numbers will have quadrupled in 10 years. Keep those same growth rates and sometime around 2028 AMZN surpasses AAPL in annual profits; right around the time they hit $15 trillion in annual revenue. I'm not all that confident that Apple can grow for 10 or even 15 years at any rate. There's a substantial risk that it all falls apart and we're all watching Zuck put his company logo on the new Apple headquarters when it finally opens. But the idea that Amazon has some magic profit engine that's going to appear sometime way down the road and justify their P/E ratio isn't just crazy, it's bananas. If anything they're already starting to succumb to the law of large numbers.
- Corrado 14y ago
  Definitely AMZN. They have two really strong, complementary markets, retail & cloud computing. This gives them longevity and the ability to weather some pretty tough storms. They have shown themselves to be agile and flexible and responsive. Look how much innovation and development happen at AWS; they release something new and improved almost every week. Plus, Jeff B. is still holding the reigns. I think AAPL have done amazing things the past 10 years, including outstanding hardware & software, perfect marketing, and a great user experience overall. I also think that they have peaked and there is nowhere to go but down. Granted, it will take a long time to hit the bottom, but they will join the ranks of IBM & Microsoft; irrelevant and ignored.
ScottBurson 14y ago
That might be a reason for a long-term decline, but it's not a reason for it to drop 10% in a few hours. Something is going on (I have no idea what). EDITED to add: ah, I see they released earnings.
- Cookingboy 14y ago
  People emotionally overreacting to the slight revenue miss (by slight I mean missed over-hyped analyst expectation by 1%). It's bizarre to see that fundamentals are completely disregarded when it comes to trading the company with the highest market cap in the world.
  - ruswick 14y ago
    The stock market is not a place for rational actors. It is a place for visceral, very exaggerated responses to trivial developments.
  - jinushaun 14y ago
    Every time a company misses expectations, I always wonder if the analysts were just simply wrong.

scarmig 14y ago

Interesting chance for a HN gut check: If you were offered $100k of Apple or $100k of Amazon right now, which would you choose? You would have to receive and hold for 10 years. To me, the answer to that is obvious (AMZN), but I'm curious if my intuition matches up with the general opinion. I'm not sure which would be a better sign. ETA: Original intent was to talk about 100k in dollars, not in shares.

aristidb 14y ago
Are you consciously taking the valuation of the stock into account?
X-Istence 14y ago
I would pick Apple. I have a feeling that in 10 years they will have re-invented themselves and be making huge profits, and paying dividends on those shares. For example, 100k of Apple shares today will net me 265,000 USD. Assume that I decide to just pocket that money ... I could live off that for a full year, easy. They pay that every quarter (or at least that's the case at the moment). I'll make money now, be able to stick it into a savings account or re-invest it into other stocks. If you gave me 100k in Amazon i'd be grateful, but keeping it for 10 years means that in the mean time it is useless to me. No dividends, trading at an excess that is absolutely insane, it will come crashing down eventually. Apple at least at that point has cash to continue operations, Amazon doesn't.
- seiji 14y ago
  Your math looks off. 100k = 100,000. 100,000 * (currently) $514 = $51 million USD. You certainly could live off that for a year. On second look, you are talking about dividends.
- ScottBurson 14y ago
  I think the parent's intent was $100k worth of each, not 100k shares.
  - X-Istence 14y ago
    I'd still pick AAPL.
yannickt 14y ago
I would probably go with AAPL. AMZN is currently trading at over 3,000 times earnings; their forward P/E is in the 150 range. They are mainly an online retailer, and retail and high profit margins usually don't go hand in hand. I expect them to grow, but it's hard for me to imagine a plausible scenario in which their growth matches their current valuation. Also, Apple pays dividends, and they have enough cash to operate for 1-5 years on zero sales. They are better positioned (IMO) to reinvent themselves without being rushed, and at the same time minimize the potential negative impact of that reinvention to their shareholders.
vosper 14y ago
I would also take Amazon - although they're huge they don't yet deliver everything you can buy (think groceries) and they have other services like AWS and Mechanical Turk that are growing and are without peer in their markets. As for Apple, I think they will have a harder time staying at the forefront in a very competitive market now that the iPhone and (to a lesser extent) iPad are no longer have the "wow" factor that they used to.
gojomo 14y ago
Can I take 80K AAPL, 20K AMZN (the rough proportion of their market-caps)? I want the 100K, but don't feel any need to prove I can beat the market in such massively-held stocks.
Steko 14y ago
Strange I think AAPL is the incredibly obvious choice here. If Amazon grows their revenue at 40% every year (like they did in 2011) and manages a 3.5% margin (which they did for years although lower at the moment) then they will start seeing profits like AAPL's 2012 around 2021. Meanwhile if AAPL grows at only 15% a year (and the trend is currently much higher) their numbers will have quadrupled in 10 years. Keep those same growth rates and sometime around 2028 AMZN surpasses AAPL in annual profits; right around the time they hit $15 trillion in annual revenue. I'm not all that confident that Apple can grow for 10 or even 15 years at any rate. There's a substantial risk that it all falls apart and we're all watching Zuck put his company logo on the new Apple headquarters when it finally opens. But the idea that Amazon has some magic profit engine that's going to appear sometime way down the road and justify their P/E ratio isn't just crazy, it's bananas. If anything they're already starting to succumb to the law of large numbers.
Corrado 14y ago
Definitely AMZN. They have two really strong, complementary markets, retail & cloud computing. This gives them longevity and the ability to weather some pretty tough storms. They have shown themselves to be agile and flexible and responsive. Look how much innovation and development happen at AWS; they release something new and improved almost every week. Plus, Jeff B. is still holding the reigns. I think AAPL have done amazing things the past 10 years, including outstanding hardware & software, perfect marketing, and a great user experience overall. I also think that they have peaked and there is nowhere to go but down. Granted, it will take a long time to hit the bottom, but they will join the ranks of IBM & Microsoft; irrelevant and ignored.

ScottBurson 14y ago

That might be a reason for a long-term decline, but it's not a reason for it to drop 10% in a few hours. Something is going on (I have no idea what). EDITED to add: ah, I see they released earnings.

Cookingboy 14y ago
People emotionally overreacting to the slight revenue miss (by slight I mean missed over-hyped analyst expectation by 1%). It's bizarre to see that fundamentals are completely disregarded when it comes to trading the company with the highest market cap in the world.
- ruswick 14y ago
  The stock market is not a place for rational actors. It is a place for visceral, very exaggerated responses to trivial developments.
- jinushaun 14y ago
  Every time a company misses expectations, I always wonder if the analysts were just simply wrong.