Microsoft vs Alphabet stock: the numbers side by side (October 2026)
How do Microsoft and Alphabet compare?
| Microsoft MSFT | Alphabet GOOGL | |
|---|---|---|
| Revenue growth | 17.8%Jun 2026 | 15.1%2025 |
| Operating margin | 46.8%Jun 2026 | 32.0%2025 |
| Free cash flow | 66,987US$ millions · Jun 2026 | 73,266US$ millions · 2025 |
| Free cash flow yield | 1.7%Today (Oct 28, 2026) | 1.8%Today (Oct 28, 2026) |
| Dividend yield | 0.7%Today (Oct 28, 2026) | 0.3%Today (Oct 28, 2026) |
| P/E, last 12 months | 27.7xToday (Oct 28, 2026) | 16.9xToday (Oct 28, 2026) |
| P/E, next 12 months | 22.5xToday (Oct 28, 2026) | 21.2xToday (Oct 28, 2026) |
| Weighted price forecast, about 1 year | 591.56 (+12 %)October 2027 | 314.61 (-3%)October 2027 |
| Weighted price forecast, about 3 years | 682.21 (+31 %)October 2029 | 369.83 (+15%)October 2029 |
Who leads on what?
| Leads | The lead is | |
|---|---|---|
| Revenue growth | Microsoft | The higher figure |
| Operating margin | Microsoft | The higher figure |
| Free cash flow | Alphabet | The higher figure |
| Free cash flow yield | Alphabet | The higher figure |
| Dividend yield | Microsoft | The higher figure |
| P/E, last 12 months | Alphabet | The lower figure |
| P/E, next 12 months | Alphabet | The lower figure |
| Weighted price forecast, about 1 year | Microsoft | The higher weighted return |
| Weighted price forecast, about 3 years | Microsoft | The higher weighted return |
What does each company do?
Microsoft sells workplace software, cloud and AI services, business and developer tools, Windows, games, devices, search and advertising.
Microsoft (MSFT), from our memo of October 28, 2026 · Microsoft stock forecast
Alphabet sells advertising, subscriptions, software, computing and devices.
Alphabet (GOOGL), from our memo of October 28, 2026 · Alphabet stock forecast
How big are Microsoft and Alphabet?
Microsoft reported revenue of US$92,279 million in the quarter to September 2026, and Alphabet reported US$127,577 million in the quarter to September 2026. Microsoft’s market value was US$3,943,383.57 million on October 28, 2026; Alphabet’s was US$4,008,166.96 million on October 28, 2026.
How fast are Microsoft and Alphabet growing, and what did their latest results show?
Microsoft’s revenue grew 17.8% in the year to June 2026; Alphabet’s grew 15.1% in 2025.
Revenue and operating income rose from the same quarter a year earlier, while the narrower Azure measure grew faster than the broader Microsoft Cloud bundle. Microsoft reorganized its reporting into “Agents and Infra” and “Devices and Consumer,” and recast earlier periods, so comparisons must use the revised structure.
Microsoft (MSFT), from our memo of October 28, 2026 · Microsoft earnings
Revenue recovered strongly after slowing in 2023, with Google Search & other still the dominant engine. YouTube advertising and subscriptions also expanded, while Google Network declined. That mix matters because not every dollar of advertising revenue has the same economics.
Alphabet (GOOGL), from our memo of October 28, 2026 · Alphabet earnings
How much cash do Microsoft and Alphabet generate, and where does it go?
Free cash flow was US$66,987 million in the year to June 2026 for Microsoft and US$73,266 million in 2025 for Alphabet. Microsoft’s dividend yield was 0.7% on October 28, 2026; Alphabet’s was 0.3% on October 28, 2026.
Capital expenditure, or capex, is cash spent on long-lived assets such as data centers and servers. Microsoft’s capex increased 79.6% in fiscal 2026, so free cash flow fell even though operating cash flow increased. That is the central cash-flow tension: the existing business produces cash, but expansion claims much of it before shareholders can use it.
Microsoft (MSFT), from our memo of October 28, 2026 · Microsoft stock forecast
Free cash flow subtracts capital spending from operating cash. Alphabet spent $91.4 billion on servers, data centers and related infrastructure in 2025, leaving $73.3 billion of free cash flow. That was barely above the prior year despite higher operating cash. The company does not disclose how much of this spending merely maintains existing capacity.
Alphabet (GOOGL), from our memo of October 28, 2026 · Alphabet stock forecast
What does an investor pay for Microsoft and Alphabet today?
The shares of Microsoft were priced at 27.7x the last 12 months’ earnings and 22.5x the next 12 months’ on October 28, 2026; those of Alphabet at 16.9x the last 12 months’ earnings and 21.2x the next 12 months’ on October 28, 2026. The free cash flow yield stood at 1.7% on October 28, 2026 for Microsoft and 1.8% on October 28, 2026 for Alphabet.
Net debt means debt minus cash; Microsoft’s September 30 balance showed about $15.2 billion before other investments and lease obligations. The current ratio was about 1.22, while the dividend yield was 0.7%. These measures describe financial capacity and cash paid out, not the return earned on new data centers.
Microsoft (MSFT), from our memo of October 28, 2026 · Microsoft dividend