Google's stock hit an all-time high on Friday, and it's up strong in early trading on Monday.
Meanwhile, Apple stock is down 35% from the high it hit last September.
What gives is that the market has grown more concerned about Apple's ability to maintain its strong growth rate and spectacular profit margin, while growing increasingly optimistic that Google's core business and mobile applications have many good years ahead of them.
Also, Apple is suffering in part because it had such an amazing run for the past five years, while Google's stock treaded water.
At the end of 2007, after a four-year rocket ride following its spectacular 2004 IPO, Google's stock took a multi-year breather.
From 2007 to the middle of 2012, as the company's hyper-growth slowed, Google's stock multiple compressed. And many investors forgot about it.
But Google the company kept growing. And Google the cash factory kept coining more and more money. And Google made several aggressive moves into mobile (Android) and mobile apps, many of which have worked out and set the company up well for the mobile era.
And now, with Google's stock having settled into a reasonable price-earnings ratio--24X trailing earnings--the stock is on the move again.
Meanwhile, back in 2007, Apple launched an innovative new product called the iPhone. In a few short years, this astounding product grew to become the largest and most profitable single product in the world (not counting oil). The mind-boggling success of the iPhone drove Apple's stock up an astounding 7X over the following five years. And Apple's market value blew past Microsoft's, Google's, GE's, and ExxonMobil's, until Apple became the most valuable company in the world.
But now Apple's competitors have caught up with the iPhone. And the explosive growth in the smartphone market has moved to emerging markets, in which most consumers don't make enough money to be able to afford a $600 phone. (There are few carrier subsidies in these markets). So phones based on Google's Android operating system are now capturing far more global market share than Apple's phone.
The good news for Apple investors is that the stock now looks cheap. If Apple can continue to grow at even a moderate rate while maintaining its profit margin (big "ifs"), the stock should deliver a solid return.
Meanwhile, Google stock is coming out of its slumber and making up for lost time.
SEE ALSO: Apple's Stock Looks Cheap