Google and Samsung go up every time Apple goes down, but not for long

By , Mar 6, 2013

apple money

With Apple’s market capitalization having fallen below the $400 billion mark, the first such drop since January 2012, many armchair analysts are observing on Twitter and elsewhere a worrying correlation between stock prices of Apple and its chief rivals Google and Samsung. Looking at the period from Apple’s September 2012 peak, each time Apple went down, Google and Samsung seemingly rose.

And with this weird correspondence between Apple’s lows and Google’s and Samsung’s highs, some analysts are calling the Internet giant “the next Apple”, estimating that Google is on its way to join the $1,000 a share club. What a difference a few months make: one analyst in April 2012 said Apple would become the world’s first $1 trillion company. While Apple’s pain = Google’s gain, luck in the stock market changes quickly…

Check out the graph below.

AAPL vs GOOG

For reference: Apple shares lost more than half their value since the September 2012 peak. Google shares are up about 30 percent since a mid-November 2012 low.

CNBC first noted back in February a symmetric divergence between Google and Apple’s share price.

Bloomberg’s Scarlet Fu looks at the widening valuation gap between Google and Apple.

Despite Apple’s woes, the iPhone maker’s market valuation beats Google’s by a hundred billion dollars.

Google’s rise is easy to explain: the company is building some serious momentum with the latest e-commerce initiatives, YouTube growth, improving mobile trends and its growing hardware biz.

But it’s not just Google, it’s Samsung, too (via Zach Epstein).

AAPL vs Samsung

Bloomberg notes that the Apple-Google gap is the widest since June 2005, adding that GOOG is trading at “25 times profit, compared with a price-to- earnings ratio of less than ten for Apple.”

As for Samsung, Business Insider’s Jay Yarow quotes analysts who think Samsung’s valuation is nearing its high point:

Learning from our Apple experience, the Galaxy S4 launch could be Samsung’s iPhone 5 ‘moment’ – in other words, when the Samsung stock peaks. The S4 should have a better processor (Exynos Octa chip) and improved display (potentially larger/flexible) but how much better can it really be?

Despite Samsung’s many businesses, only one makes real money.

Samsung operating profit

And with Samsung’s high-end phones basically subsidizing its handset operating margins which is in the 20 percent range (Apple: 40 percent or more), Samsung’s margins will suffer as the market trends to the mid and low end.

I guess it’s the circle of life.

Companies grow, reach their peak and then decline, only to grow again.

Apple’s been through this cycle a couple times in its past and no tech company can escape this trend.

Once sales decelerate and margins collapse, spooked investors will punish your stock.

It may not be an optimal system to run the markets and business, but it’s the best we have and no one has come up with a better solution.

Thoughts?

  • Share:
  • Follow:
  • Boss

    Apple need a iPhone Pro & iPhone Air

    • http://www.facebook.com/people/Antonio-Gzz/100001847768813 Antonio Gzz

      or iPhone Galaxy SV LOL!

      • Kurt

        Would that be like an Samsung Galaxy SV but much smaller, slower and with next to no features?

    • Liam Mulcahy

      Yessssss

  • http://twitter.com/leereichardt Lee Reichardt

    This is because stock prices are based on wall street analysts. And we all know how that worked out in the 2008 economic downturn

    • pauleebe

      You clearly don’t understand the “economic downturn” of the late 2000′s

      • http://twitter.com/leereichardt Lee Reichardt

        No I do… It’s because American (and British) banks over valued themselves and companies and it wasn’t sustainable. Banks and governments borrowed too much and couldn’t repay their debts. Again, MOSTLY based on analysts from Wall street and other such institutions… Oh I understand it clearly as our country was greatly affected by their inadequacies and their over-zealous desire for greed.

      • pauleebe

        No, not based on analysts. Based on irresponsible granting of credit. Analysts may be irresponsible at times, but bad banking was the result of the crisis of the 2000′s. Bankers issued mortgages they shouldn’t have out of greed, so I partially agree with that.

      • Kurt

        He clearly doesn’t know who held a majority in both the house and senate and clearly doesn’t know the impact of Clinton and Barney Frank on the housing mess.

      • Tr1pTr0p

        And you are clearly desperate to find a way to blame one side, even though you don’t realize which one is there only to fuck you up in any way they can.

      • Kurt

        Obama has been doing a great job of screwing my people up for 4 years and we get to look forward to another 4 years of the same. yeay! legalize killing americans yeay! trying to taking away our guns, yeay! but you’re still a dip shit liberal

      • Tr1pTr0p

        Why don’t we talk about Bush for a moment? What did he do? How about START those pointless wars that caused the recession? How about being responsible for killing thousands of innocent people, whether 9/11, or the middle east? You see, unlike you, I’m well aware of those facts and I’m well aware that NONE of those political pieces of shit are there to represent the people; but the rich assholes who fund their elections. Again, unlike you, I do not want to be associated with any party, and that is why I’m proud to be a liberal.

      • Guest

        recession started from clinton..ohhh don’t let facts get in the way of your BS. “proud to be a liberal” eww. your gross, go away hahaha

        Go away fagdroid

      • Tr1pTr0p

        Do yourself a favor and click this link. bit ly/XVwutT If Bush was such a capable fellow, why didn’t he fix all the bullshit Clinton supposedly created? Well, he did have 8 years to fix it, and all he did was make it worse. It’s not only that you fail at fact checking, but fail at basic common sense. What do liberals stand for?

      • Guest

        better than being a dirty Croat

      • Tr1pTr0p

        That isn’t an answer to any of my questions. I’ll just assume you don’t have the answers and are just clinging to what you have; hate and bigotry. I’m proud to be Croat, as well as a progressive liberal, and you are the one who should be ashamed of yourself.

      • http://twitter.com/leereichardt Lee Reichardt

        Can Americans please, for the sanity of everyone else in the world, stop with their pointless political arguing… I think you’ll find that the two parties are exactly the same just different leaders. Stop turning this into a political argument and leave it as an economic… Or even better… leave it as no argument.,.. Please and thank you.

  • TesticularFortitude

    It’s no coincidence. Spooked analysts? lol

  • Ernie Marin

    This is great, the lower the stock, the more motivated Apple is in improving their products, hopefully this will mean the must needed revamp of all Apple products, starting with the iPhone and IOS

    • Kurt

      What do you want done with iOS?

  • Tr1pTr0p

    “Google and Samsung go up every time Apple goes down.” No, you fucking dumbass. Apple goes down BECAUSE Google and Samsung go up. How out of touch with reality do you have to be in order to make such a retarded statement? You’re nothing but an embarrassment to this site.

    • Kurt

      ” “Google and Samsung go up every time Apple goes down.” No, you fucking
      dumbass. Apple goes down BECAUSE Google and Samsung go up. How out of
      touch with reality do you have to be in order to make such a retarded
      statement? You’re nothing but an embarrassment to this site.”<—–Tr1pTr0p being a typical d*ck to everyone on this site.

      btw, Ziberg writes very long informative articles that are in depth. Other sites the blog posts are so short and lack info.