One-time competitors in personal computing led by big personalities and innovators Steve Jobs and Bill Gates, Apple (AAPL) and Microsoft (MSFT) are two diversified technology giants today. In fact, Apple stock and Microsoft stock are the top two stocks by market weight in the S&P 500.

We’re pitting these two companies against each other to determine which is the better stock to buy now. Is it time to buy Apple stock? Or is it time to buy Microsoft?

As part of this feature, we’re providing free access to the full Morningstar analyst reports for both companies for free for a few weeks. By using the reports, investors can dig into some of Morningstar’s proprietary metrics and find out what our analysts have to say about each company’s business strategy, competitive advantages, valuation, and risk.

Investors also have access to similar metrics about close competitors, and the bull and bear cases for both Apple and Microsoft stocks. Just click through the links below to access them. There are also videos explaining how our key proprietary metrics work.

Here’s how Apple and Microsoft currently score, as of May 9, 2022:

Apple Stock (AAPL)

  • Price/Fair Value: 1.21
  • Fair Value Uncertainty: High
  • Economic Moat: Narrow
  • Capital Allocation Rating: Exemplary

Microsoft Stock (MSFT)

  • Price/Fair Value: 0.78
  • Fair Value Uncertainty: Medium
  • Economic Moat: Wide
  • Capital Allocation Rating: Exemplary

Who wins this stock versus stock matchup? That depends on what Morningstar metrics matter most to an investor. Let’s take a deeper dive into a few of them.

Price/fair value winner: Microsoft

Morningstar’s analysts calculate a fair value estimate for each stock they cover. The fair value estimate represents the intrinsic value of a stock, based on how much cash we think the company can generate in the future. A stock’s price/fair value is simply its current market price divided by the fair value estimate. A stock trading below 1.0 is undervalued; a stock trading around 1.0 is fairly valued; and a stock trading above 1.0 is overvalued.

As of this writing, we think Microsoft’s stock is about 22% undervalued, while Apple’s stock is 21% overvalued. The winner from a price perspective is Microsoft.

Uncertainty winner: Microsoft

Morningstar's uncertainty rating assesses the predictability of a company's future cash flows and, therefore, the level of certainty we have in our fair value estimate of a given company. Companies that enjoy sales predictability, modest operating and financial leverage, and limited exposure to contingent events carry low uncertainty; those with less-predictable sales, significant leverage, and significant exposure to contingent events carry higher uncertainty.

Our analysts think Microsoft’s cash flow uncertainty is medium, while Apple’s uncertainty is high. Microsoft wins for its lower uncertainty, because we’re more confident in our fair value estimate of that stock.

Economic moat winner: Microsoft

The Morningstar Economic Moat rating represents a company's maintainable competitive advantage. A company with an economic moat can fend off competition and earn high returns on capital for many years to come. A company whose competitive advantages we expect to last more than 20 years has a wide moat, one that can fend off its rivals for 10 years has a narrow moat, while a firm with either no advantage or one that we think will quickly dissipate has no moat.

Our analysts think Microsoft has carved out a wide economic moat, while Apple has only built a narrow economic moat. Microsoft gets the win on this metric.

Capital allocation winner: Tie

The Morningstar Capital Allocation Rating represents our assessment of how well a company manages its balance sheet, investments, and shareholder distributions. Analysts assign each company one of three ratings—Exemplary, Standard, or Poor—based on their assessments of how well a management team provides shareholder returns. Adept corporate managers can make a good company even better.

Both Apple and Microsoft earn our top rating when it comes to capital allocation.

Which is the best stock to buy today?

At the end of the day, the “winner” of any stock-versus-stock match from Morningstar’s perspective is the stock that’s trading at the largest discount to our fair value estimate after being adjusted for uncertainty. The Morningstar Rating for stocks encapsulates just that. Stocks rated 4 and 5 stars are undervalued after being adjusted for uncertainty, stocks rated 3 stars are fairly valued, and stocks rated 1 or 2 stars are overvalued after being adjusted for uncertainty.

Microsoft earns a 4-star rating as of this writing, while Apple earns a 2-star rating. Microsoft stock is the better stock to buy today from Morningstar’s perspective.