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TheStreet Open House

Apple vs. Amazon: The Ground Is Shifting

Has the Apple express left the station, leaving you wondering if there is room to grow? No, not at all, we are likely to start seeing the move higher now. The 200-day moving average is $586 and, using technical analysis, there isn't a lot of resistance from here to there.

The moving average will gradually work its way lower even as Apple moves higher, but with a reasonable $100 upside without strain, what other stock are you going to find with better prospects for growth (not value)? Plus, you get the "value" aspect thrown in for free.

Amazon, another great company for consumers, is the polar opposite in many ways, but not so much in others. I shop at Amazon like so many others, but I am also smart enough to check prices on eBay (EBAY) and other sites before pressing the "complete order" button.

Rocco Pendola, a good friend and director of social media at TheStreet (TST), and I have a bet with the price of Amazon. I bet Amazon will see $200 before it sees $300.

I don't recall the exact date of the bet, but it was over six months ago. Rocco has a valid point that he is willing to share with me. Amazon provides a great customer experience and leads in several market spaces.

Where we depart in our analysis is that I don't believe price-to-earnings ratios almost as high as the national debt can be overcome by a company that is as large as Amazon. Simply put, there isn't enough growth available anymore unless Amazon enters new markets

Even if Amazon does, any market will have to be very large to have a meaningful impact on earnings.

Without a game-changing event, Amazon will have its hands full just trying to remain profitable, much less earn enough that the stock becomes a "value" before imploding. Short sellers have largely avoided Amazon because they haven't smelled blood yet. But once the cracks in the recent stock-price support become more apparent, sellers will unload shares, and there will be fewer buyers stepping in.

Disclosure: The writer holds no positions in any stock mentioned except for TST.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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