Amazon vs Microsoft
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KIRA’s take AI analyst
I put Amazon and Microsoft side by side, using each one’s latest annual report. Here is what stands out:
- Amazon is the larger business, with $716.9B of revenue in fiscal 2025 against $331.8B for Microsoft, about 2.2 times as much.
- Microsoft grew revenue faster (17.8%, against 12.4%).
- Microsoft kept more of each dollar of sales as operating profit (46.8% operating margin, against 11.2%).
- Microsoft turned more of its sales into free cash flow (20.2% FCF margin, against 1.1%).
- Microsoft earned a higher return on the capital invested in it (30.9%, against 20.6%).
Who comes out ahead
Of the 11 measures where higher (or lower) is clearly better, how many each company leads.
Amazon
AMZN
1/11
Net debt / EBITDA
Microsoft
MSFT
9/11
Revenue growth5-year growthGross marginOperating marginNet marginFCF marginReturn on capitalReturn on equityShare count change
Side by side
Best in the row
| Latest fiscal year | AMZN FY25 | MSFT FY26 |
|---|---|---|
| Size | ||
| Market cap | $2.70T | $3.91T |
| Revenue | $716.9B | $331.8B |
| Free cash flow | $7.7B | $67.0B |
| Net income | $77.7B | $133.7B |
| Growth | ||
| Revenue growth | 12.4% | 17.8% |
| 5-year growth | 13.2% | 14.6% |
| Share count change | 1.0% | −0.2% |
| Profitability | ||
| Gross margin | 50.3% | 67.9% |
| Operating margin | 11.2% | 46.8% |
| Net margin | 10.8% | 40.3% |
| FCF margin | 1.1% | 20.2% |
| Return on capital | 20.6% | 30.9% |
| Return on equity | 22.3% | 34.0% |
| Balance sheet | ||
| Net debt | −$41.5B | $30.0B |
| Net debt / EBITDA | −0.3x | 0.2x |
| Dividends and buybacks | $0.0M | $48.7B |
| Valuation & quality | ||
| P/E | 20.0x | — |
| Piotroski F-score | 6 | 6 |
Ten years
Revenue
Operating margin
Free cash flow
Return on capital
Each company's latest fiscal year; fiscal years end in different months. The best value in each row is highlighted where higher (or lower) is clearly better. Not investment advice.