Apple vs. Microsoft: Down 10%, Which Magnificent 7 Stock is a Better Buy?

The so-called “Magnificent 7” group of stocks has been notably weak in 2025, with only social media monolith Meta Platforms (META) still clinging to positive ground on a year-to-date basis. Electric vehicle (EV) company Tesla (TSLA) has been the worst performer of the group, down more than 44% already in 2025, while artificial intelligence (AI) semiconductor specialist Nvidia (NVDA) has undergone a quick 21% correction since the start of the year.

Meanwhile, in the middle of the Mag 7 pack are longtime rivals Apple (AAPL) and Microsoft (MSFT), both down about 10% on a year-to-date basis. But for investors who feel bold enough to start hunting for bargains in this volatile market, which mega-cap stock looks like a better buy?

AAPL vs. MSFT: Round One

Over the longer term, both stocks have outperformed. AAPL boasts a five-year return in excess of 288%, while MSFT has returned more than 158% over the same time frame.

While both tech companies are growth-focused, they have a history of rewarding investors with dividends, too. Microsoft is a soon-to-be Dividend Aristocrat, with over 20 years of consistent dividend growth and a current yield of 0.84%. Apple has grown dividends consistently for over a decade, and yields 0.42%.

On Wall Street, MSFT has earned a stronger average analyst sentiment of “Strong Buy,” compared to Apple's relatively tepid “Moderate Buy” consensus rating. 

Is MSFT a Better Value Than AAPL?

While both companies command premium valuations, Microsoft arguably justifies its higher price with superior profit margins of 35.43% compared to Apple's 24.3%, demonstrating more efficient operations and stronger pricing power. 

Microsoft's forward adjusted price-to-earnings (P/E) ratio of 29.84 is actually slightly lower than Apple's 32.59, suggesting MSFT is relatively less expensive, despite its stronger growth prospects and market position in emerging technologies like AI. 

Though Apple boasts an impressive return on equity of 160.83%, Microsoft's fundamentals appear more balanced, with a healthy ROE of 33.36% and consistent growth across key metrics. Notably, Microsoft's higher earnings per share of $12.42, on a trailing 12-month basis, compared to Apple's $6.97 indicates stronger profitability per share, providing better value for investors. 

The Bottom Line: Which Stock is the Better Buy?

Based on current market data and analysis, MSFT appears to be the better buy right now. Microsoft's dominant position in enterprise software, cloud computing, and artificial intelligence presents multiple growth vectors, while Apple faces increasing competition in its core hardware business and slowing iPhone sales in key markets. 

While both companies are excellent businesses, Microsoft's combination of stronger analyst ratings, higher profit margins, reasonable valuation relative to growth, and diversified revenue streams makes it the more attractive investment option at current prices.