Is Microsoft Stock A Smarter Buy Than Google After Its Massive 250% Rally?

Alphabet’s (GOOG) stock is up by over 250% since the beginning of 2023. That’s great for Google. But wait a minute, Microsoft’s (MSFT) stock is up a meager 56% during the same period. Hard to believe, but Alphabet’s stock is up more than 4x Microsoft’s stock. This, despite the fact that Microsoft’s revenue growth for the 2023-2025 period stood at 44%, compared to just 31% for Google. Does that make sense? We don’t think it does, and believe Microsoft presents a compelling valuation at current levels. See how Microsoft’s growth and margins compare to its peers, including GOOG, AMZN, and META.

Sure, Google’s profit margins (net income as a percentage of sales) are healthy at 33% versus an impressive 39% for Microsoft, making it even harder to explain the 4x growth in Google’s stock when compared to Microsoft. Alphabet’s P/E is also noticeably higher at 29x based on its current market price and TTM EPS, while…