Alphabet vs Microsoft
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KIRA’s take AI analyst
I put Alphabet and Microsoft side by side, using each one’s latest annual report. Here is what stands out:
- Alphabet is the larger business, with $402.8B of revenue in fiscal 2025 against $331.8B for Microsoft.
- Microsoft grew revenue faster (17.8%, against 15.1%).
- Microsoft kept more of each dollar of sales as operating profit (46.8% operating margin, against 32.0%).
- Microsoft turned more of its sales into free cash flow (20.2% FCF margin, against 18.2%).
- Alphabet earned a higher return on the capital invested in it (36.7%, against 30.9%).
Who comes out ahead
Of the 11 measures where higher (or lower) is clearly better, how many each company leads.
Alphabet
GOOGL
6/11
5-year growthReturn on capitalReturn on equityPiotroski F-scoreNet debt / EBITDAShare count change
Microsoft
MSFT
5/11
Revenue growthGross marginOperating marginNet marginFCF margin
Side by side
Best in the row
| Latest fiscal year | GOOGL FY25 | MSFT FY26 |
|---|---|---|
| Size | ||
| Market cap | $3.90T | $3.97T |
| Revenue | $402.8B | $331.8B |
| Free cash flow | $73.3B | $67.0B |
| Net income | $132.2B | $133.7B |
| Growth | ||
| Revenue growth | 15.1% | 17.8% |
| 5-year growth | 17.2% | 14.6% |
| Share count change | −1.7% | −0.2% |
| Profitability | ||
| Gross margin | 59.7% | 67.9% |
| Operating margin | 32.0% | 46.8% |
| Net margin | 32.8% | 40.3% |
| FCF margin | 18.2% | 20.2% |
| Return on capital | 36.7% | 30.9% |
| Return on equity | 35.7% | 34.0% |
| Balance sheet | ||
| Net debt | −$75.3B | $30.0B |
| Net debt / EBITDA | −0.5x | 0.2x |
| Dividends and buybacks | $55.8B | $48.7B |
| Valuation & quality | ||
| P/E | 15.9x | — |
| Piotroski F-score | 8 | 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.