The week of Oct. 26 was pivotal in the tech world as dismal earnings reports from several of the industry's titans confirmed that the economic boom of the COVID-19 pandemic was well and truly over. Tech giants Alphabet (GOOG -1.10%) (GOOGL -1.23%) and Microsoft (MSFT -1.27%) were among the companies that posted disappointing quarterly results and saw their stock prices subsequently plunge. 

With powerful brands such as Windows, Office, Android, and Google between them, Alphabet and Microsoft have had unquestionable impacts on consumer technology and are still likely to continue doing so well into the future. The steep declines in their share prices throughout 2022 have effectively put their stocks on sale as both companies will likely see substantial gains in the long term.

As a result, you might be wondering which is the better buy: Alphabet or Microsoft? Let's find out. 

Alphabet

On Oct. 25, Alphabet stock dipped 5% as multiple segments in its third-quarter revenue report missed analysts' forecasts. The company's overall Q3 2022 revenue of $69.1 billion grew 6% year over year, below expectations for $70.7 billion or 8.5% year-over-year growth.

Additionally, Google Search revenue of $39.5 billion rose 4.3%, while Google Cloud brought in $6.9 billion, up 37.6%. However, their rise wasn't enough to distract investors from a 1.9% decline in YouTube ad revenue and a 1.6% decrease in Google Network revenue. Along with multiple other tech companies, Alphabet attributed its Q3 woes to currency challenges from a strong U.S. dollar and an overall decline in consumer spending.

Despite poor short-term prospects, Alphabet remains a robust business. The company's Google Search segment has continued to prove its resilience despite a slowdown in the digital advertising market. Its roughly 84% market share of search engines should help boost cash flow as Alphabet navigates the next few quarters. Moreover, the company's Google Cloud business also has excellent long-term prospects.

After finishing Q3 2022 with a net cash position of $101 billion and a price-to-earnings ratio that is almost one-third below what it was a year ago, now might be an excellent time to invest in Alphabet.

Microsoft 

Like Alphabet, Microsoft saw its share price fall 6% in after-hours trading on Oct. 25, following a less-than-stellar quarterly report. The company's year-over-year revenue grew 11% to $50.1 billion, with its Intelligent Cloud segment seeing a 20% rise to $20.3 billion. However, slowing growth for Microsoft's cloud computing platform, Azure, concerned investors.

Revenue for Azure in Q1 2023 grew 35%, with the company reporting 40% growth the quarter before and 50% growth in Q1 2022. Microsoft CFO Amy Hood cited higher energy costs for Azure's decreasing profit margins. 

Investor weariness is justified considering that some 40% of the company's revenue in Q1 2023 came from its Intelligent Cloud segment, which is dominated by Azure earnings. However, the company has plenty of room for growth ahead. 

Macroeconomic conditions may have hampered Azure in 2022, but the global cloud computing market is expected to see an annual growth rate of 17.9% through to 2028, hitting $791 billion.

Additionally, Microsoft's ventures in advertising and gaming have excellent long-term prospects. While the Windows company isn't the first that comes to mind in the world of advertising, its recent partnership with Netflix could mean big gains down the road. Microsoft expects its advertising business to grow to $20 billion in revenue in a year; its 26% year-over-year revenue bump from LinkedIn in its fiscal 2022 is a promising step in the right direction.

Moreover, when it comes to gaming, Microsoft is growing its market share in multiple areas of an industry expected to grow 13.2% every year until 2028, according to Business Fortune Insights. The company has the third-largest market share of game consoles at 20%, with analysts expecting it to hit 27% by 2026. Furthermore, its gradual expansion into cloud and mobile gaming, along with its planned acquisition of Activision Blizzard, will only grow its prominent role in the lucrative industry.  

Microsoft and Alphabet are both potent companies that will likely continue dominating the tech world for decades to come and would make excellent additions to any portfolio. However, if you can only choose one, Microsoft is the way to go. Its highly diversified business will likely safeguard it from the worst of short-term market declines.

Meanwhile, Alphabet's overwhelming reliance on advertising could see its earnings hit especially hard in 2023. Over 80% of the company's revenue is generated from advertising, which has already begun to slow in its latest quarter. As a result, you're better off investing in Microsoft with its promising prospects in multiple growing industries.