Microsoft vs. Alphabet: Is GOOGL’s Cloud Growth Worth More Than Investors Think?

Microsoft Corporation (NASDAQ:MSFT) has long been treated as the safer way to own cloud computing, supported by its corporate subscriptions, large customers, and an established profit stream. Alphabet Inc. (NASDAQ:GOOGL) is beginning to complicate that argument. Google Cloud is expanding much faster than Azure, and, crucially, the additional sales are producing substantial operating profit. Yet Yahoo Finance's latest valuation data shows that Microsoft is trading at 25.13 times forward earnings against 22.83 times for Alphabet. The gap is modest, but the question behind it is considerable. Does Microsoft's predictable software business still warrant a premium when Google's cloud economics are improving so rapidly?