According to experts, these are the most valuable brands in the world. Are there any great stocks to buy now?

How much is a great brand really worth? It’s a question investors should care about because strong brands can translate into strong businesses, which in turn can lead to strong stock performance.

So let’s examine some of the world’s top brand companies to discover how valuable those brands really are and whether those stocks are a buy right now.

Image source: Getty Images.

What are the top brands?

Consultancy Brand Finance publishes an annual list of the top 500 global brands, and these four companies top the list:

Brand Finance experts use a variety of measures to calculate a brand’s value, including:

• Marketing investment: Marketing factors that increase brand loyalty and market share
• Stakeholder Equity: Brand perceptions, especially among consumers
• Business performance: Financial measures that convey sales volume and pricing power.

The The rankings show how successful brands capture consumer attention, generate sales, gain market share and leverage pricing power.

Consider Apple (AAPL 0.05%)the company at the top of the ranking. Brand Finance estimates that the brand value of the Apple name has increased by 74% in the past year to the dollar516 billion.

“According to our research, more than 50% of respondents recognized Apple as expensive but worth the price, strengthening the brand’s ability to demand a price increase,” it writes.

So it’s clear: strong brands are good for business. But are the stocks behind those top brands worth buying?

Are these stocks worth buying now?

Let’s start with Apple.

It is not only the most valuable brand in the world, it is also the most valuable public company. With a market capitalization of $3.3 trillion, Apple outsells its nearest rival by about $200 billion.

However, the company has its problems. First, sales of Apple’s signature product, the iPhone, have declined in recent years. The company still sells hundreds of millions of iPhones a year, but it appears to have saturated the market. Consequently, Apple must rely on price increases or sales of other products and services to increase revenue. In addition, the company’s services division has seen significant revenue growth in recent years, bringing the company’s year-over-year revenue growth rate to 5%. However, that’s a significantly lower growth rate than some of its top competitors, which is why I remain lukewarm on Apple stock.

I am much more optimistic Microsoft (MSFT 0.94%)and here’s a big reason why: When you compare the two companies’ revenue growth over the past three years, Microsoft blows Apple out of the water.

AAPL earnings data (quarterly annualized growth) by YCharts.

Microsoft has averaged nearly 14% revenue growth over the past three years; Apple averaged about 4%. If this trend continues, Microsoft will begin to close the still considerable revenue gap between itself and Apple. Microsoft is also likely to overtake Apple again to become the world’s most valuable company. In any case, Microsoft’s investments in the cloud computing industry are paying off and delivering big revenue growth right now. Additionally, its forays into artificial intelligence (AI) could provide another big boost in the future as AI really takes off. That’s why I prefer Microsoft stock over Apple right now.

Then there is Amazon (AMZN 1.34%). Similar to Microsoft, Amazon is a huge player in the cloud services market, and that deal provided a big boost to its top line. Amazon’s revenue growth has averaged 11% over the past three years. Its strengths lie in fast-growing areas such as cloud services, AI and robotics. That’s to say nothing of its massive e-commerce business, which has become more efficient thanks to timely infrastructure investments. In short, I’ve been a longtime fan of Amazon stock and see no reason to change that opinion.

Finally, there is Alphabet (GOOG 2.23%) (GOOGL 2.33%)the parent company of Google. Of course, Alphabet has some challenges to overcome: AI could very well change the way people search the Internet, and the company has been accused of monopolistic behavior in a federal antitrust lawsuit.

However, none of these concerns are new. The antitrust lawsuit was filed in 2020 and will likely take years before it is fully resolved.

As for AI eating Google Search’s lunch, it’s a threat, but it’s not like Alphabet isn’t aware of it. The company is hard at work on its own AI-related projects and tools. Indeed, far from ending the company’s search dominance, AI innovation could help the company find new ways to add value to its suite of online apps.

In short, each of the top brands is backed by solid stock, albeit with its own caveats. Amazon and Microsoft are my favorites because of their rapid growth, while Apple and Alphabet remain stocks worth watching.