Why Microsoft is a better bet than Apple

New York(CNN Business) Over the last couple days, Microsoft and Apple have been taking turns as the world's most valuable publicly traded company.

Don't be surprised if Microsoft eventually puts Apple in its rear view mirror for good.

Microsoft is generating strong sales from worker productivity tools like Office and the LinkedIn social network as well as its cloud businesses -- namely the lucrative Azure hosting unit.

The success in these businesses -- LinkedIn revenues were up 33% in Microsoft's last quarter while Azure sales surged 76% -- validates Microsoft CEO Satya Nadella's strategy to reinvent Microsoft as a social media and cloud computing company.

Sure, Microsoft (MSFT) has some consumer businesses like its Xbox gaming division and Surface tablets. But Microsoft, by and large, is a company that is far more immune to fickle consumer tastes in tech.

The same cannot be said for Apple (AAPL), which is struggling to convince Wall Street that consumers will keep buying its increasingly pricey iPhones.

That's a big reason why Microsoft's stock is up nearly 30% this year and Apple shares have gained just 6%.

Analysts are predicting that Apple's sales will increase just 5% in its current fiscal year, which ends next September. That revenue growth is expected to slow to 4% in fiscal 2020.

Microsoft's sales, on the other hand, are expected to rise 13% in fiscal 2019 and another 11% in fiscal 2020.

Microsoft is also a more profitable company than Apple. Microsoft's net profit margins are a whopping 30% of total sales compared to net margins of 22.5% for Apple.

Finally, Microsoft is now a far more diversified company than Apple. Yes, Apple still sells iPads, Macs and has a growing services and App Store business. But the iPhone accounts for 60% of Apple's overall sales.

Microsoft's revenue stream is almost evenly split, with 29% coming from the cloud, 34% from productivity tools like Office and LinkedIn and the remaining 37% from personal computing, a category that includes Windows, the Bing search engine, gaming and Surface.

The biggest criticism of Apple in the post-Steve Jobs, Tim Cook era is that it hasn't changed all that much. Look! Yet another iPhone!

Microsoft, however, has made a major transformation under Nadella. That's why Microsoft is now worth more than it ever was under Bill Gates and Steve Ballmer.

And Microsoft, ironically enough, has avoided much of the regulatory scrutiny on the tech sector as of late.

While lawmakers in Washington and around the globe are targeting the likes of Facebook (FB), Google owner Alphabet (GOOGL), Amazon (AMZN), Twitter (TWTR) and yes, Apple, Microsoft has managed to stay above the fray.

It's a far cry from when Microsoft was the poster child for an antitrust breakup case in the late 1990s and early 2000s.