Apple Inc. (NASDAQ:AAPL) announces its fiscal second-quarter earnings Tuesday, May 2, after the close. Facebook Inc (NASDAQ:FB) isn’t far behind, announcing its first-quarter earnings a day later. And both have sizable implications, given a 25%-plus run for AAPL stock so far this year, and a 30%-plus gain for FB.

Both earnings reports are expected to be solid, as well as confirm the idea that both stocks are first-rate. But if you wanted to pile your money into a single big-tech holding, where would you be better off? Facebook stock, or Apple stock?

Let’s explore.

Cash Hoard

Apple has almost a quarter of a trillion dollars in cash on its balance sheet. It’s likely to go over $250 billion — nearly nine times Facebook’s cash hoard — after announcing earnings.

Apple’s cash doubled in just 4.5 years and now accounts for 32% of its market cap. Facebook’s $29.4 billion in cash (before Wednesday’s earnings) accounts for just 6.6% of its $448.2 billion market cap.

If you back out Apple’s cash, investors are paying 9.6 times its 2018 earnings estimate of $10.28 per share for AAPL stock. Meanwhile, if you do the same with Facebook, investors are paying 26.0 times its 2018 earnings estimate of $6.70 per share.

Sure, Warren Buffett’s philosophy has changed about how much to pay for a good company, but not enough for him to own FB stock rather than Apple. Why pay $26 for a dollar of earnings when you can pay less than $10?

Apple stock is still the value play when it comes to technology stocks, especially if Trump is successful at lowering corporate taxes.

Services Revenues Continue to Shine

The iPhone is the razor; Apple’s Services revenue is the razor blades. It doesn’t matter that iPhone revenue shrunk by 12% in fiscal 2016 because Services were able to make up $4.4 billion of the year-over-year decline through higher-margin revenue.

The Gillette model is critical to Apple’s long-term success.

Sure, it’s important that the iPhone 8 be a big success considering the decelerating sales of its most outstanding product. But every person who gets a new phone is going to utilizing Apple Services in some manner, and that’s going to continue to mean big things for its bottom line.

Credit Suisse analyst Kulbinder Garcha, who follows AAPL stock, sees Apple’s Services revenue hitting $52 billion by 2020. At a current run rate of more than $28 billion, it could get there sooner. The analyst also sees Services revenue accounting for 33% of its gross profits in the near future.

Assuming Apple’s annual revenues and gross profits hit $300 billion and $120 billion respectively by 2020, its Services business should have gross profits of almost 80% and operating profits close to 60%. So, even if its Services business accounts for just 17% of overall revenue by 2020, the segment’s operating profits will account for 25% or more of Apple’s overall profitability.

That makes the potential introduction of money-transfer service later this year another possible revenue driver for Apple Pay, which has had a rough ride since its introduction more than two years ago.

What About Facebook?

There’s no denying the power of Facebook’s multiple social media platforms’ ability to generate advertising revenue. Facebook’s revenue has grown 49.4% compounded annually over the past five years to $27.6 billion. In that time, its compound annual growth rate for operating cash flow has been even more impressive at 59.7%.

By comparison, Apple’s five-year compound annual growth rate of revenue and operating cash flow is 14.8% and 11.9%, respectively.

If the discussion were this straightforward, there would be no question as to which stock was better for most investors.

However, here are two things to consider:

• Apple is a 41-year-old company. It’s amazing that it’s even around let alone the biggest publicly traded company in the world. Facebook has yet to begin shaving at just 13 years of age. Like a soprano who hits puberty, FB might not look and sound nearly as good as it matures and ages.
• Apple has a product that’s far more of a necessity than Facebook does. Sure, marketers need Facebook, but would anybody else care if it disappeared other than those people who use it every day because they can’t get themselves to stop? I highly doubt it.

On the other hand, Apple’s iPhone is a necessity for almost anyone on the go. Yes, the same theory applies to its competitors, but if you decide to toss your Samsung Electronics (OTCMKTS:SSNLF) smartphone, you’re going to get another one, possibly an iPhone.

In the meantime, Apple simply grows its Services business generating more revenue from each iPhone user until its next significant product introduction ramps up growth anew.

Facebook, on the other hand, will run out of ideas to keep users engaged. A recent Facebook study, suggests InvestorPlace Feature Writer James Brumley, sees “Peak Facebook” setting in at some point in the future.

When that happens, Facebook stock is sunk. It might be sooner than investors think.

Apple’s primary product is a necessity; Facebook’s isn’t. That’s the big difference between the two companies. AAPL stock is the better buy, but both are great businesses — and investments.

As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.