There's no doubt that both Microsoft (MSFT 0.48%) and Alphabet (GOOG 1.45%) (GOOGL 1.45%) have turned plenty of investors into millionaires. But, for anyone that doesn't own either one yet, which is the more likely stock to do the same for a newcomer today?
It's got to be Alphabet. Here's why.
Why not Microsoft?
If you already own Microsoft, you're hardly doomed. Windows remains the dominant name in computer operating systems. Its cloud computing business remains a healthy cash cow as well. It's losing ground on a couple of important fronts, though. One of them is the all-important artificial intelligence (AI).
Image source: Getty Images.
Tepid interest in the software giant's AI-powered personal assistant known as Copilot illustrates this point. Whereas the 450 million people paying for cloud-based access to its personal productivity platform, Microsoft 365, could easily add access to the higher-performance premium version of Copilot, only 15 million subscribers have actually done so.
While it's not a devastating number, given Windows' position as PC-based gatekeeper to the worldwide web for most of the world's internet users, while Microsoft Office remains a go-to personal productivity software suite, it's an alarmingly poor metric.
Meanwhile, even the free version of Copilot only boasts a market share of 1% of the traffic that free-to-use AI-powered chat-based assistants are drawing, according to data from SimilarWeb. For perspective, ChatGPT continues to dominate this arena with a market share of nearly two-thirds, while Google's Gemini accounts for about one-fifth of this technology's user requests.
NASDAQ: MSFT
Key Data Points
Granted, AI isn't everything. Microsoft's cloud business is still a very big part of its bottom line. Even then, though, numbers from Synergy Research Group suggest Microsoft's cloud arm is losing market share even if it is experiencing revenue growth. In an environment where beating your competition is critical to your stock's value, mere forward progress isn't good enough.
In a more philosophical sense, all of it suggests that too many of this company's offerings are losing relevance. It happens, and it can be fixed. But it's not easy, nor do these fixes come fast.
Why Alphabet?
So who is Microsoft losing cloud computing market share to? If you guessed Alphabet's Google, you guessed right. Synergy's numbers go on to highlight that Google's cloud business's share of worldwide cloud computing revenue continued to grow to reach a record-breaking 21% in the fourth quarter of last year.
That's impressive, but even more impressive is the impact this growth is finally making on Alphabet's bottom line. Whereas the company's cloud computing revenue grew a hefty 48% year over year during Q4, that progress more than doubled the unit's operating income to $5.3 billion.
NASDAQ: GOOGL
Key Data Points
That's still a minority of the company's total bottom line, to be clear, which rolled in at $35.9 billion for the final quarter of last year.
Cloud computing is Alphabet's fastest-growing business, however, and the global cloud market's fastest-growing service provider. Given Straits Research's prediction that the worldwide cloud computing industry is poised to grow at an annualized pace of nearly 19% through 2033, Alphabet's growth-leading cloud arm could become a major breadwinner soon enough.
In the meantime, the company's flagship business remains surprisingly strong.
Even against a backdrop of economic turmoil and stepped-up competition from Amazon, Google's ad revenue improved a little more than 13% year over year during the fourth quarter of 2025, accelerating its full-year growth pace of 11.4%. In contrast with Microsoft's performance, Alphabet's numbers suggest a growing degree of relevance for its services.
Weigh what's likely
Both dynamics could change at some point in the future, of course. Given that consumer and institutional perceptions of each company's offerings are pretty well etched in stone and likely slow to change, however, Alphabet's superior performance could persist for years. The same goes for its stock.
