By Geoffrey Seiler
Publication Date: 2025-12-30 04:00:00
Alphabet (GOOGL +0.00%) (GOOG +0.02%) and Microsoft (MSFT +0.26%) are two of the largest cloud computing companies in the world, and both have been seeing strong growth as a result of artificial intelligence (AI). However, in 2025, Alphabet’s stock clearly shone; it’s up around 65% as of this writing, compared to about a 16% gain for Microsoft.
Let’s see which stock is best positioned to outperform in 2026.
The case for Microsoft
Microsoft was hitting on all cylinders in 2025, although its stock still slightly trailed the performance of the S&P 500 heading into the final week of trading. Last quarter, the company grew its total revenue by 18% year over year and its adjusted earnings per share (EPS) by 23%, as it saw strength across segments.
The growth is being led by its cloud computing unit, Azure, which has been the fastest growing of the big three cloud providers. Last quarter, Azure revenue surged 40%, driven by demand for AI services. It was the ninth consecutive quarter of…
