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AAPL vs. AMZN: Jim Cramer Picked The Right One

In late October 2021, CNBC host Jim Cramer chose his favorite stock between AAPL and AMZN. Jim has been right so far, but will his top pick continue to outperform?

In the most recent earnings season, late in October 2021, Jim Cramer was emphatic: after looking at the financial performance of each company, he determined that Apple stock  (AAPL) - Get Apple Inc. Report would be a better pick than Amazon  (AMZN) - Get Amazon.com, Inc. Report.

Below, I explain why he has been right about the best performer so far. I then discuss whether AAPL shares will continue to outperform in 2022.

Figure 1: Apple and Amazon logo.

Figure 1: Apple and Amazon logo.

(Read more from Apple Maven: Apple Stock: This Will Prove To Be A Buying Opportunity)

Jim Cramer on AAPL vs. AMZN

During a panel on CNBC, the host of Mad Money indicated that, in the Big Tech faceoff, he would rather hold shares of the Cupertino company over those of its peer:

“Apple is much better than Amazon. Amazon has structurally gotten too big to be able to deliver what Prime does without costing too much.”

Since that day, AAPL has outperformed AMZN by quite a bit: 10 percentage points in less than three months, as the chart below depicts.

Figure 2: AAPL vs. AMZN performance in the past 3-months.

Figure 2: AAPL vs. AMZN performance in the past 3-months.

Jim Cramer has been clearly right about his preference. What is interesting, however, is that Amazon stock actually performed better for nearly a month after the interview, suggesting that Q3 earnings week was not quite the reason why the market turned sour on AMZN and excited about AAPL later in Q4.

As I discussed about a month ago, Apple rallied strongly to very briefly reach the $3 trillion market cap starting in mid-November. The most likely reasons for the runup were (1) excitement over the 2022-2025 growth opportunities in metaverse and autonomous vehicles, and (2) consensus strength in the iPhone segment through the holiday season and beyond.

How about 2022?

More recently, Jim Cramer once again chimed in on the mega-cap tech space. He clearly still sees upside in Apple stock at the start of the new year.

In fact, the celebrity investor listed AAPL as a top 5 legacy technology stock to own in 2022 — although I bet some Apple investors would take issue with the term “legacy” here. According to Jim, the appeal of these companies amid a rising rate environment is the following:

“While most of the money-losing cloud based software stocks are now off limits, there are plenty of tech names that make real things and generate real profits.”

Cramer supported his bullish stance on Apple not only on his broader views summarized above, but also on the small window of opportunity that the early January selloff unveiled. He also expressed confidence that demand would strengthen with the end of the supply chain crisis.

How about AMZN?

The same arguments above could be used to also support a buy of Amazon stock: “real things and real profits”; normalization of demand as supply bottlenecks get resolved; and lower valuation — in the case of AMZN, the stock has not seen all-time highs since July 2021.

For these reasons, I continue to think that AMZN will outperform AAPL in 2022, even though the latter has already been winning the foot race at the start of January (see below).

This is not to say, however, that I would not own Apple stock at current levels. In fact, I think both Big Tech names will continue to produce lavish, market-beating gains over the long run.

Twitter speaks

Jim Cramer has been right about Apple being a better pick than Amazon after Q3 earnings season. Do you think that this is still the case, ahead of Q4 earnings?

(Read more from the Apple Maven: Apple Stock: Careful With Big Tech in 2022, Says This Expert)

(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting the Apple Maven)