Comprehensive Stock Comparison
Compare Microsoft Corporation (MSFT) vs Alphabet Inc. (GOOGL) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | GOOGL | 15.1% revenue growth vs MSFT's 14.9% |
| Value | GOOGL | PEG 0.91 vs 1.27 |
| Quality / Margins | MSFT | 39.0% net margin vs GOOGL's 32.8% |
| Stability / Safety | MSFT | Beta 0.88 vs GOOGL's 0.99 |
| Dividends | MSFT | 0.8% yield, 19-year raise streak, vs GOOGL's 0.3% |
| Momentum (1Y) | GOOGL | +83.6% vs MSFT's -0.2% |
| Efficiency (ROA) | GOOGL | 22.2% ROA vs MSFT's 17.9%, ROIC 24.7% vs 27.9% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Valuation efficiency (growth/$)
Defensive / Recession hedge
Business Model
What each company does and how it makes money
Microsoft is a global technology company that develops software, cloud services, and hardware products. It generates revenue primarily through cloud services like Azure (~40% of revenue), productivity software including Office 365 and Dynamics, and personal computing through Windows licensing and Surface devices. Its key competitive advantage is the deeply entrenched enterprise ecosystem—Windows and Office dominance creates a powerful network effect that drives adoption of its cloud and productivity suites.
Alphabet is a technology conglomerate best known as the parent company of Google, which dominates the digital advertising market through search, YouTube, and display ads. It generates over 80% of its revenue from advertising, with the remainder coming from Google Cloud services, hardware sales, and subscription products like YouTube Premium. Its primary moat is the massive network effect of its search ecosystem — billions of users, advertisers, and content creators locked into its platforms through data, scale, and habit.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
GOOGL leads in 3 of 6 categories (Valuation Metrics, Profitability & Efficiency). MSFT leads in 2 (Financial Metrics, Analyst Outlook). 1 tied.
Financial Metrics (TTM)
GOOGL and MSFT operate at a comparable scale, with $402.9B and $305.5B in trailing revenue. MSFT is the more profitable business, keeping 39.0% of every revenue dollar as net income compared to GOOGL's 32.8%.
| Metric | MSFTMicrosoft Corpora… | GOOGLAlphabet Inc. |
|---|---|---|
| RevenueTrailing 12 months | $305.5B | $402.9B |
| EBITDAEarnings before interest/tax | $184.8B | $150.2B |
| Net IncomeAfter-tax profit | $119.3B | $132.2B |
| Free Cash FlowCash after capex | $77.4B | $73.3B |
| Gross MarginGross profit ÷ Revenue | +68.6% | +59.7% |
| Operating MarginEBIT ÷ Revenue | +46.7% | +32.0% |
| Net MarginNet income ÷ Revenue | +39.0% | +32.8% |
| FCF MarginFCF ÷ Revenue | +25.3% | +18.2% |
| Rev. Growth (YoY)Latest quarter vs prior year | +16.7% | +18.1% |
| EPS Growth (YoY)Latest quarter vs prior year | +59.8% | +31.2% |
Valuation Metrics
At 28.8x trailing earnings, MSFT trades at a 0% valuation discount to GOOGL's 28.8x P/E. Adjusting for growth (PEG ratio), GOOGL offers better value at 0.97x vs MSFT's 1.53x — a lower PEG means you pay less per unit of expected earnings growth.
| Metric | MSFTMicrosoft Corpora… | GOOGLAlphabet Inc. |
|---|---|---|
| Market CapShares × price | $2.92T | $1.69T |
| Enterprise ValueMkt cap + debt − cash | $2.95T | $1.73T |
| Trailing P/EPrice ÷ TTM EPS | 28.79x | 28.84x |
| Forward P/EPrice ÷ next-FY EPS est. | 23.84x | 27.26x |
| PEG RatioP/E ÷ EPS growth rate | 1.53x | 0.97x |
| EV / EBITDAEnterprise value multiple | 18.12x | 11.54x |
| Price / SalesMarket cap ÷ Revenue | 10.36x | 4.20x |
| Price / BookPrice ÷ Book value/share | 8.54x | 9.18x |
| Price / FCFMarket cap ÷ FCF | 40.74x | 23.10x |
Profitability & Efficiency
GOOGL delivers a 31.8% return on equity — every $100 of shareholder capital generates $32 in annual profit, vs $31 for MSFT. GOOGL carries lower financial leverage with a 0.17x debt-to-equity ratio, signaling a more conservative balance sheet compared to MSFT's 0.18x. On the Piotroski fundamental quality scale (0–9), GOOGL scores 7/9 vs MSFT's 6/9, reflecting strong financial health.
| Metric | MSFTMicrosoft Corpora… | GOOGLAlphabet Inc. |
|---|---|---|
| ROE (TTM)Return on equity | +30.5% | +31.8% |
| ROA (TTM)Return on assets | +17.9% | +22.2% |
| ROICReturn on invested capital | +27.9% | +24.7% |
| ROCEReturn on capital employed | +29.7% | +30.3% |
| Piotroski ScoreFundamental quality 0–9 | 6 | 7 |
| Debt / EquityFinancial leverage | 0.18x | 0.17x |
| Net DebtTotal debt minus cash | $30.3B | $41.3B |
| Cash & Equiv.Liquid assets | $30.2B | $30.7B |
| Total DebtShort + long-term debt | $60.6B | $72.0B |
| Interest CoverageEBIT ÷ Interest expense | 56.44x | 903.26x |
Total Returns (with DRIP)
A $10,000 investment in GOOGL five years ago would be worth $30,266 today (with dividends reinvested), compared to $17,186 for MSFT. Over the past 12 months, GOOGL leads with a +83.6% total return vs MSFT's -0.2%. The 3-year compound annual growth rate (CAGR) favors GOOGL at 51.5% vs MSFT's 17.3% — a key indicator of consistent wealth creation.
| Metric | MSFTMicrosoft Corpora… | GOOGLAlphabet Inc. |
|---|---|---|
| YTD ReturnYear-to-date | -16.8% | -1.1% |
| 1-Year ReturnPast 12 months | -0.2% | +83.6% |
| 3-Year ReturnCumulative with dividends | +61.3% | +247.8% |
| 5-Year ReturnCumulative with dividends | +71.9% | +202.7% |
| 10-Year ReturnCumulative with dividends | +718.2% | +773.4% |
| CAGR (3Y)Annualised 3-year return | +17.3% | +51.5% |
Risk & Volatility
MSFT is the less volatile stock with a 0.88 beta — it tends to amplify market swings less than GOOGL's 0.99 beta. A beta below 1.0 means the stock typically moves less than the S&P 500. GOOGL currently trades 89.3% from its 52-week high vs MSFT's 70.7% drawdown — a narrower gap to the peak suggests stronger recent price momentum.
| Metric | MSFTMicrosoft Corpora… | GOOGLAlphabet Inc. |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 0.88x | 0.99x |
| 52-Week HighHighest price in past year | $555.45 | $349.00 |
| 52-Week LowLowest price in past year | $344.79 | $140.53 |
| % of 52W HighCurrent price vs 52-week peak | +70.7% | +89.3% |
| RSI (14)Momentum oscillator 0–100 | 39.8 | 40.8 |
| Avg Volume (50D)Average daily shares traded | 28.4M | 28.2M |
Analyst Outlook
Wall Street rates MSFT as "Buy" and GOOGL as "Buy". Consensus price targets imply 48.6% upside for MSFT (target: $584) vs 14.6% for GOOGL (target: $357). For income investors, MSFT offers the higher dividend yield at 0.82% vs GOOGL's 0.26%.
| Metric | MSFTMicrosoft Corpora… | GOOGLAlphabet Inc. |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $583.67 | $357.19 |
| # AnalystsCovering analysts | 78 | 81 |
| Dividend YieldAnnual dividend ÷ price | +0.8% | +0.3% |
| Dividend StreakConsecutive years of raises | 19 | 2 |
| Dividend / ShareAnnual DPS | $3.23 | $0.82 |
| Buyback YieldShare repurchases ÷ mkt cap | +0.6% | +2.7% |
Historical Charts
Charts are rendered on first load. Hover for details.
Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Mar 20 | Feb 26 | Change |
|---|---|---|---|
| Microsoft Corporati… (MSFT) | 100 | 245.02 | +145.0% |
| Alphabet Inc. (GOOGL) | 100 | 495.8 | +395.8% |
Alphabet Inc. (GOOGL) returned +203% over 5 years vs Microsoft Corporati… (MSFT)'s +72%. A $10,000 investment in GOOGL 5 years ago would be worth $30,266 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Microsoft Corporati… (MSFT) | $91.2B | $281.7B | +209.1% |
| Alphabet Inc. (GOOGL) | $90.3B | $403.0B | +346.4% |
Microsoft Corporation's revenue grew from $91.2B (2016) to $281.7B (2025) — a 13.4% CAGR. Alphabet Inc.'s revenue grew from $90.3B (2016) to $403.0B (2025) — a 18.1% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Microsoft Corporati… (MSFT) | 22.5% | 36.1% | +60.4% |
| Alphabet Inc. (GOOGL) | 21.6% | 32.8% | +52.0% |
Microsoft Corporation's net margin went from 23% (2016) to 36% (2025). Alphabet Inc.'s net margin went from 22% (2016) to 33% (2025).
Chart 4P/E Ratio History — 9 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| Microsoft Corporati… (MSFT) | 26.3 | 35.5 | +35.0% |
| Alphabet Inc. (GOOGL) | 58.5 | 29 | -50.4% |
Microsoft Corporation has traded in a 25x–48x P/E range over 9 years; current trailing P/E is ~29x. Alphabet Inc. has traded in a 19x–59x P/E range over 9 years; current trailing P/E is ~29x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Microsoft Corporati… (MSFT) | 2.1 | 13.64 | +549.5% |
| Alphabet Inc. (GOOGL) | 1.39 | 10.81 | +677.7% |
Microsoft Corporation's EPS grew from $2.10 (2016) to $13.64 (2025) — a 23% CAGR. Alphabet Inc.'s EPS grew from $1.39 (2016) to $10.81 (2025) — a 26% CAGR.
Chart 6Free Cash Flow — 5 Years
Microsoft Corporation generated $72B FCF in 2025 (+28% vs 2021). Alphabet Inc. generated $73B FCF in 2025 (+9% vs 2021).
MSFT vs GOOGL: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is MSFT or GOOGL a better buy right now?
Microsoft Corporation (MSFT) offers the better valuation at 28.8x trailing P/E (23.8x forward), making it the more compelling value choice. Analysts rate Microsoft Corporation (MSFT) a "Buy" — based on 78 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — MSFT or GOOGL?
On trailing P/E, Microsoft Corporation (MSFT) is the cheapest at 28.8x versus Alphabet Inc. at 28.8x. On forward P/E, Microsoft Corporation is actually cheaper at 23.8x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Alphabet Inc. wins at 0.91x versus Microsoft Corporation's 1.27x — a PEG below 1.0 traditionally signals the market is underpricing earnings growth.
03Which is the better long-term investment — MSFT or GOOGL?
Over the past 5 years, Alphabet Inc. (GOOGL) delivered a total return of +202.7%, compared to +71.9% for Microsoft Corporation (MSFT). A $10,000 investment in GOOGL five years ago would be worth approximately $30K today (assuming dividends reinvested). Over 10 years, the gap is even starker: GOOGL returned +773.4% versus MSFT's +718.2%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — MSFT or GOOGL?
By beta (market sensitivity over 5 years), Microsoft Corporation (MSFT) is the lower-risk stock at 0.88β versus Alphabet Inc.'s 0.99β — meaning GOOGL is approximately 12% more volatile than MSFT relative to the S&P 500. On balance sheet safety, Alphabet Inc. (GOOGL) carries a lower debt/equity ratio of 17% versus 18% for Microsoft Corporation — giving it more financial flexibility in a downturn.
05Which has better profit margins — MSFT or GOOGL?
Microsoft Corporation (MSFT) is the more profitable company, earning 36.1% net margin versus 32.8% for Alphabet Inc. — meaning it keeps 36.1% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: MSFT leads at 45.6% versus 32.1% for GOOGL. At the gross margin level — before operating expenses — MSFT leads at 68.8%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
06Is MSFT or GOOGL more undervalued right now?
The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential. By this metric, Alphabet Inc. (GOOGL) is the more undervalued stock at a PEG of 0.91x versus Microsoft Corporation's 1.27x. A PEG below 1.0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, Microsoft Corporation (MSFT) trades at 23.8x forward P/E versus 27.3x for Alphabet Inc. — 3.4x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for MSFT: 48.6% to $583.67.
07Which pays a better dividend — MSFT or GOOGL?
All stocks in this comparison pay dividends. Microsoft Corporation (MSFT) offers the highest yield at 0.8%, versus 0.3% for Alphabet Inc. (GOOGL).
08Is MSFT or GOOGL better for a retirement portfolio?
For long-horizon retirement investors, Microsoft Corporation (MSFT) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.88), 0.8% yield, +718.2% 10Y return). Both have compounded well over 10 years (MSFT: +718.2%, GOOGL: +773.4%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
09What are the main differences between MSFT and GOOGL?
Both stocks operate in the Technology sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. MSFT pays a dividend while GOOGL does not, making them suitable for different income and tax situations. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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