Apple and Google: The tables have turned

FORTUNE — In July 2012, the Presidential election was kicking into high gear, the Olympics were about to begin, and most people thought it was a matter of time before shares of Apple hit $1,000.

Google (GOOG), meanwhile, was just muddling along. After doubling during 2009, its stock had been treading water around $600 a share for three and a half years. Apple (AAPL), too was trading around $600 a share, but the iPhone 5 was coming and the company Steve Jobs built seemed to have the wind at its back.

Oh, how things have changed since then. Apple’s stock has fallen 29% since mid-July. And Google? It’s gained 46%, pushing past the $800 milestone while Apple languishes near $424 a share. Apple is tussling with investors over whether to pay more dividends, while Google rallies merrily on.

There has been a lot of discussion over Apple’s decline in recent months, and comparatively less about Google’s corresponding rise. But the difference in between the two boils down to this: Apple is increasingly seen as coming off one of the greatest runs in the history of Silicon Valley. And Google may just be at the start of one.

That is the new image of Google after two quarters of impressive earnings and more signs that the company is laying plans for long-term growth. “Looking at the consumer technology world over the next 10 to 20 years, we believe Google is far and away the best-positioned company,” wrote Gene Munster, an influential tech analyst at Piper Jaffray.

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Munster pointed not to search or other advertising, which still accounts for 87% of the company’s revenue, but to new ventures that have yet to hit the market, like Google Glass and self-driving cars, which he called one of Google’s “biggest opportunities in the next 10 years.”

Compare that with Apple, which is seeing its share of the smartphone and tablet market erode over time as lower-margin, lower-cost Android rivals sell more products, and as Apple responds with its own lower-margin products like the iPad Mini.

Although Apple infamously holds its cards close to its vest, it’s working on its own new products — some that could create an entirely new category like the rumored iWatch. Apple is also taking time to create a new TV device. Such new products could offer Apple new areas of growth — the iWatch alone could produce $6 billion in revenue — and beef up the company’s profit margins to levels that would impress investors again.

For now, however, sentiment is against Apple and strongly in favor of Google. This week, more analysts have joined the Google $1,000 club, citing other factors that could propel the stock higher in the coming year. Jeffries & Co. argued that a four-digit price is possible, given improvements in the Motorola handset business and non-search areas such as YouTube and commerce initiatives. Perhaps more encouraging, clickthrough rates on mobile ads are rising, Jeffries analyst Brian Pitz wrote.

How deserved is this reversal of fortune between Apple and Google’s stocks? Perhaps not as much as the stock charts might suggest. For much of the three years when Google was trading around $600 a share, it was subject to speculation that, first, it couldn’t thrive in the era of Facebook (FB), and then later uncertainty around the new CEO Larry Page. The effectiveness of Page’s bold steps are only now becoming apparent to investors.

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Apple, meanwhile, was riding a multi-year wave of bullishness and strong earnings growth that was driven by the iPhone and iPad. Those two products took years to conceive, design, and execute into the products we know. One thing that is certain about Apple — it’s not sitting quietly counting its pile of cash. It’s trying to design new category-defining products. The real question is whether those products will resonate with consumers the way the iPad has.

In other words, there are real, fundamental changes going on at both of these companies, but the effects of those changes are greatly enhanced in the stock performance. Just as Google was underappreciated two years ago, so Apple could be today. Just as Apple was revered with blind bullishness then, so Google is at risk of being overvalued if it does reach $1,000 too quickly.

That doesn’t mean Google is doomed or that Apple is set to rebound quickly. Both of these companies are going to have, at different times, their fallow periods as well as their blowout earnings reports. Both are going to keep working on projects that will offer growth for investors with a long-term focus.

But for now, consider that Google is trading at 18 times its expected earnings this year, double the ratio for Apple. That shouldn’t surprise anyone, but it also suggests that the recent reversal of fortunes making financial headlines today are priced into both of these tech giants. What is much less certain is where they will both be in a year or so from now.

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