3 Tech Stocks Fighting for Tablet Dominance

Apple Inc. (AAPL), Alphabet Inc (GOOGL), and Microsoft Corporation (MSFT) are battling it out with holiday shoppers on the front lines of the tablet war

by Kirra Fedyszyn

Published on Dec 2, 2015 at 3:28 PM

Now that two of the craziest shopping days of the year -- Black Friday and Cyber Monday -- are behind us, it seems that this year's winners were, unsurprisingly, electronics. And one of the most in-demand items topping wish lists this holiday season -- despite declining numbers overall for the year -- is the tablet.

The first commercially successful model to hit the markets was Apple Inc.'s (NASDAQ:AAPL) iPad, released in 2010. Since then, other tech companies have been clamoring onto the scene with their own versions, hoping lower prices and broader functions will secure them a piece of this highly profitable pie. This year, tablets running Alphabet Inc's (NASDAQ:GOOGL) Android operating system claimed an estimated two-thirds of the market, with Apple's iconic iPad scooping up nearly 25%, and Microsoft Corporation's (NASDAQ:MSFT) Surface line picking up roughly 8.5%.

That's not to say that everyone is on board with the tablet craze. While some parents and policy makers are looking at ways to get more tech into the classroom, some schools are rejecting the idea and opting for more hands-on, imagination-based methods for education. Television providers aren't thrilled, either, especially as this year's batch of new, extra-large tablets are being used more than ever for streaming shows and movies. Here's how the three most popular tablet-touting tech companies are doing on the charts.

AAPL stock has added 6.6% this year, but is down 0.4% today at $116.86. Sales of the Apple Watch have been somewhat disappointing, and a new competitor joining the market is unlikely to help things next year. Still, Apple has been doing well in other areas, such as the development of its Apple Music service, which has just found a new partner in wireless speaker maker Sonos Inc. The stock has recovered some ground since hitting an annual low of $92 in August, and analysts are taking note -- Goldman Sachs recently added Apple to its "Conviction Buy" list. But while short interest on the stock has fallen by more than 21% over the last two reporting periods, options traders may not be convinced. AAPL holds a Schaeffer's put/call open interest ratio (SOIR) of 0.83 -- higher than 80% of readings in the last 12 months.

GOOGL hit another new all-time high of $793.05 today, and was last seen down 0.6% at $779.44. The shares have gained 47.5% on a year-to-date basis, and analysts believe in Alphabet Inc's prospects. Of the 33 firms following GOOGL, 31 give it a "buy" rating or better. Plenty of options traders are betting the stock will take a dip, though. GOOGL's SOIR of 1.11 is the highest such reading of the past year, meaning near-term traders haven't been this put-heavy at any time in the last 52 weeks. Apparently, these traders think not everything Alphabet Inc does is a home run (like this attempt to revamp its social network).

MSFT is currently the smallest of these three names when it comes to the tablet market, but the stock should hardly be ignored. On top of adding 19.3% for far this year, Microsoft Corporation hit a 15-year high of $55.96 earlier today, and was last seen trading at $55.40, up 0.3% for the day. That puts the shares within striking distance of their all-time high of $59.97, seen on Dec 30, 1999. MSFT has plenty of projects in the works, too, as it unveiled its new Skype for Business platform on Monday, and announced a new cloud-computing deal with Hewlett Packard Enterprise Co. (NYSE:HPE) on Tuesday. Options traders are looking for new highs, too. MSFT's 50-day call/put volume ratio at the ISE, CBOE, and PHLX is 2.98 -- just two percentage points away from the annual bullish high.

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