Apple (AAPL +1.76%) and Netflix (NFLX 0.79%) are two of the major tech juggernauts in the stock market, both on the consumer-facing side. Apple is primarily in the business of creating innovative consumer technology products, such as its flagship iPhone, while Netflix is considered the pioneer and leader of the streaming sector.
Netflix is a good deal smaller, with a market cap of roughly $471 billion (as of Nov. 17), while Apple is part of the all-consuming "Magnificent Seven" and has a market cap of close to $4 trillion, making it one of the largest stocks in the world.
Which stock should you buy now?
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One has forged a clearer path ahead
While Apple is part of an elite group of stocks set to heavily benefit from artificial intelligence (AI), the company is viewed as an outlier because it does not yet appear to have found a promising AI strategy. Additionally, Apple has not invested as much into AI infrastructure as the hyperscalers. However, the company appears to be an obvious place where AI can make a significant impact, especially as it becomes more ingrained in many of Apple's game-changing consumer products.
Still, in some ways, Apple has avoided some of the recent AI slump because it hasn't invested as much into AI, and the sales of its new iPhone 17 have also performed well in China recently.
NASDAQ: AAPL
Key Data Points
Netflix, on the other hand, is not as closely associated with the AI giants, but management has said that it is all in on generative AI. The streaming platform already leverages AI to make streaming recommendations and improve the viewer's experience, while film creators can reportedly use generative AI tools provided by Netflix to do things like make characters appear younger.
Netflix has demonstrated strong financial results. It's surpassing 300 million global subscribers, increasing pricing on its monthly tiered memberships, and raising its full-year revenue guidance. The company should also have a significant runway as it grows its advertising business and gets more involved with different types of content.
NASDAQ: NFLX
Key Data Points
Content really is king these days, and Netflix's leadership positions it well for success. For this reason, I would recommend buying Netflix over Apple right now, despite Netflix trading at a higher forward earnings multiple of more than 43.
I don't necessarily view Apple as a bad stock to buy, and the company is unlikely to cede its consumer product leadership anytime soon. But the path for Netflix is clearer in my mind, as well as the significant growth opportunity. In this case, I do think investors should pay up for the higher valuation.
