Two Rallies

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Today Apple topped the $700 billion value market cap threshold during regular trading, a remarkable achievement. The company’s shares have since slipped some, but it’s impossible to deny the technology giant’s massive rally. Apple, a company that was once small enough to be dismissed whole-cloth is now not only the world’s most valuable technology company, it’s the world’s most valuable public company of any industry.

Small fact: Three of the four most valuable public companies, by my last check, were technology firms. Apple, Microsoft, and Google share the top four slots along with ExxonMobil.

However, a recent change of the guard in the ranking among the four, and the growing gap between Apple and its competition highlight two rallies: Both Microsoft and Apple have seen their shares soar since their current chief executives took over the reins. (It’s worth nothing that Apple did go through a public rough patch thorough 2012 and early 2013, but those declines have since been erased, and more.)

Since Tim Cook has taken charge of Apple, it’s share price has risen 119.9 percent.  And Microsoft has seen it’s shares rise 31.58 percent since Satya Nadella took over. Keep in mind that Nadella has been CEO for less than a year, while Cook has been in charge since 2011, so the latter has had a bit more time.

Both companies have managed impressive runs this year. Apple, for example, is up around 48 percent so far this year alone.

Given the rallies, it’s a fair question to ask how long the gains can be sustained. Apple is expected to see declining iPad sales. Microsoft’s new business efforts in the SaaS space remain, compared to its other revenue lines, nascent. But certainly the two executives can be content with their performance to date, at least in the financial sense.

The question now becomes what part of the rise in their companies’ shares can be attributed to the executives, and what part to pre-existing positive corporate momentum. Depending on how you answer that question, either company could be a buy or a sell. Hold onto your hats and lay your bets.