From Nasdaq: 2024-05-01 05:20:00

Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOG, NASDAQ: GOOGL) are tech giants with diverse product offerings. Microsoft dominates in cloud services and gaming, while Alphabet’s Google is known for its search engine and mobile operating system. Both companies are heavily investing in the AI market but have different strategies. Microsoft’s partnership with OpenAI has fueled its Azure growth, while Alphabet is catching up with its Gemini platform.

Microsoft’s strategic investments in OpenAI are driving strong growth in its cloud services. The company’s revenue and earnings are expected to grow in fiscal 2024 and 2025. On the other hand, Alphabet is focusing on AI development but faces challenges in the generative AI race against Microsoft. Google Cloud’s revenue is growing, but Alphabet still relies heavily on its advertising business for revenue.

The better AI play between Microsoft and Alphabet lies with Microsoft, which has shown faster growth, better diversification, clearer AI ambitions, and higher cloud revenues. Microsoft is trading at a slightly higher forward earnings multiple but is positioned as the stronger AI growth play among the two tech giants. Analysts also seem bullish on Microsoft’s prospects going forward.



Read more at Nasdaq: Better AI Stock: Microsoft vs. Alphabet