Apple and Intel Could Be Going Into Business Together. Which Is the Better Buy?

Apple (NASDAQ: AAPL) and Intel (NASDAQ: INTC) could be getting back into business together, at least according to a June 18 social media post from President Donald Trump. The deal, which neither company has publicly confirmed yet, would give Apple another manufacturer for its in-house designed chips, diversifying its supply chain. For Intel, it would be another much-needed win for its foundry business.

Intel's stock popped significantly on the news, as this will be a much bigger deal for the chipmaker than it is for Apple. However, as of the close of trading on Thursday, the stock was back to about where it closed on June 17.

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Intel stock has been a better performer than Apple over the past year, rising dramatically as signs of a long-hoped-for turnaround have emerged. But between the two tech companies, which looks like the better stock to buy from here? 

New business prospects are spurring both stocks on

Apple is a fairly simple business to understand: It makes consumer tech hardware. The iPhone obviously headlines this, and it still provides about half of the company's revenues. But it has other products that make up a nice chunk of its revenue, too. The biggest area of growth for Apple is its services segment, which produces regularly recurring subscription revenue streams, in contrast to hardware purchases that may occur every two to five years.

One area where Apple lacks a strong subscription service offering is artificial intelligence (AI). Though it does have Apple Intelligence, currently, there is no AI subscription. That may be coming, and could spur major growth down the road. But it hasn't happened yet.

Intel is in a similar boat. It has a legacy processor business that isn't delivering much strong growth, and it's operating in a saturated market with several rising competitors. It will find the processor market a difficult space in which to generate real growth. Instead, its chip foundry business is where investors are hoping to see the biggest gains. While Intel has been working to win those third-party contracts, the segment still hasn't delivered the results investors want. 

Both businesses are bolstered by existing product lines with hopes for a stronger future. With Apple's core product lineup stronger than Intel's, I think it's the winner of this category.