TLDR
- Microsoft revenue hit $281.7B in 2025, up 15%, with Azure crossing $75B for the first time
- Alphabet’s Google Services operating margin reached 41.9% in Q4 2025
- Microsoft has 38 Buy ratings and an average analyst price target of $556.15
- Alphabet has 53 analysts covering GOOGL with an average target of $397.48
- Wall Street favors both, but Microsoft is seen as the cleaner investment case
Microsoft and Alphabet are two of the biggest names in tech, and both are deeply tied to the future of cloud computing and artificial intelligence. But they offer investors very different things.
Microsoft’s 2025 annual results were strong across the board. Revenue rose 15% to $281.7 billion. Operating income grew 17% to $128.5 billion. Azure crossed $75 billion in revenue for the first time, up 34%.
In its fiscal third quarter of 2026, Microsoft posted revenue of $82.9 billion, up 18%. Operating income came in at $38.4 billion, and net income was $31.8 billion.
What stands out about Microsoft is how connected its products are. Azure growth feeds into demand for Office, Teams, GitHub, and security tools. AI is already embedded in products that enterprise customers pay for today.
That makes it easier for analysts to model growth. There’s no need to wait and see whether AI will eventually become a revenue driver — it already is.
Alphabet’s Strengths
Alphabet’s numbers are also strong. Google Services operating income rose 22% to $40.1 billion in Q4 2025, with a 41.9% operating margin. Search and advertising revenue hit $63.1 billion in that quarter, up 17%.
Google Cloud had already reached an annual revenue run-rate above $50 billion by mid-2025. Management pointed to continued margin expansion alongside rising customer demand.
Alphabet also has YouTube, subscriptions, and a large cash-generation engine. The company has been adding AI features to Search, including AI Overviews, AI Mode, and Lens.
The concern for some investors is whether AI will strengthen Google’s Search business over time or put pressure on it. That question hasn’t been fully answered yet.
What Analysts Think
Microsoft carries a Moderate Buy consensus on MarketBeat, with 38 Buy ratings, 1 Strong Buy, and 5 Holds. The average 12-month price target is $556.15.
Alphabet’s GOOGL has 53 analyst ratings with an average target of $397.48. The GOOG share class shows 29 buys, 7 strong buys, and 3 holds, with an average target of $362.73.
Both stocks are well-regarded on Wall Street. Microsoft’s setup is seen as cleaner, with broader enterprise exposure and faster visible cloud growth.
Alphabet may appeal to investors who see value in a cheaper big-tech name with strong Search and Cloud assets and believe the AI concerns are overstated.
Microsoft’s AI monetization is already built into the business. Alphabet’s full AI upside still depends on how Search evolves.
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