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Apple vs. Microsoft: Evaluating the Two Giants' Growth Since the 1980s

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Tech companies have long been some of the most popular on Wall Street, and many firms have changed the way millions of people live. Yet, even with the rise of Amazon (AMZN - Free Report) , Facebook (FB - Free Report) , and younger tech startups, Apple (AAPL - Free Report) and Microsoft (MSFT - Free Report) still have an outsized influence on consumers and the stock market. So let’s compare the two historic tech companies in terms of both revenue growth and stock price movement.

Revenue Growth

Microsoft went public at $21 per share on March 13, 1986, after Bill Gates and Paul Allen founded the company in 1975.

IBM (IBM - Free Report) introduced its first personal computer in 1981, which used Microsoft’s 16-bit operating system MS-DOS. The company then shipped its Windows 1.0 operating system in 1985 after two years of development. Microsoft reported revenues of $591 million in 1988 and then launched the earliest version of Office in August 1989.

Microsoft introduced Windows 3.0 in May 1990 and went on to report fiscal 1992 sales of $2.76 billion. But it was the launch of Windows 95 that really sent the company on its massive run. Just two years later, in 1997, Microsoft reported revenues of $11.36 billion.

Windows 98 was also a massive success, helping lift revenues to $18.97 billion in 1999. Steve Ballmer was then appointed CEO in 2000, one year before Microsoft introduced Office XP, Windows XP, and the Xbox.

Gates transitioned away from his day-to-day role to concentrate on his charitable endeavors in 2008. The company pulled in revenues of $60.42 billion that year. Microsoft would go on to expand its business, diving into cloud computing, AI, and other new growth areas, as well as completing some splashy deals—including its acquisition of LinkedIn for $26.2 billion in 2016. The company reported total revenues of $89.95 billion in fiscal 2017.

 

Steve Jobs and Steve Wozniak started Apple Computers one year after Microsoft in 1976. The company went public four years later, on December 12, 1980, for $22 per share.

Apple pulled in $4.07 billion in total revenue in 1988, four years after it launched its first Macintosh in 1984. The company saw its revenues climb 30% to $5.28 billion in 1989. Apple then grew its revenues by roughly 15% a year over the next several years, and reported revenues of $11.06 billion in 1995. But, Apple would go on to suffer three straight years of double-digit revenue declines to report sales of $5.94 billion in 1998.

The company would experience a few more major downturns, and reported revenues of $5.74 billion in 2002—despite the launch of the first iPod in 2001. However, this is when things quickly started to change for Apple. The company launched the iPod mini in 2004, and the iPod video, iPod nano, and the iPod shuffle over the following few years, to push revenues to $19.32 billion by 2006.  

Then, in 2007, Apple launched the iPod, and it changed the company forever. Apple reported fiscal 2008 revenues of $37.49 billion and hasn’t looked back since. The tech giant reported 2017 revenues of $229.23 billion, which marked over a 510% surge from 2008.

 

Stock Price Movement

Clearly, investors can see that Microsoft and Apple have both grown into multibillion-dollar powerhouses since they went public in the 1980s.

Microsoft has experienced a smoother top-line expansion, while Apple remained relatively flat until the mid-2000s. Today, Apple’s full-year revenues are much larger then Microsoft's, but their stock price performances also paint an interesting picture.  

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Bottom Line

Over the long run, investors will see that MSFT has climbed higher, with Apple stock dominating throughout most of the 2000s. Yet, some might be somewhat surprised to see that shares of Microsoft have climbed above Apple over the last year.

Looking ahead, Apple’s quarterly revenues are projected to climb by 15.3% to reach $52.37 billion, based on our current Zacks Consensus Estimates. Meanwhile, the company’s full-year sales are projected to pop by 13.5% to hit $260.18 billion. Both of these would mark rather impressive jumps for a company of Apple’s size.

Microsoft is also expected to post strong top line growth. The company is projected to post quarterly revenues of $29.17 billion, which would represent an 18% expansion. Microsoft’s fiscal year revenues are projected to surge by 15.5% to hit $109.44 billion.

With that said, it certainly will be very interesting to watch both of these companies over the next few years and beyond.

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