From 24/7 Wall St. · Alex Sirois · · 1m 10s
The Next $5 Trillion Company: Alphabet or Microsoft?
Alphabet's cloud growth vs Microsoft's AI cash flow race for $5T market value.
In brief
Alphabet's cloud growth vs Microsoft's AI cash flow race for $5T market value. Alphabet's faster cloud growth and stock sales face Microsoft's AI cash flow advantage in the race to $5 trillion. Originally reported by 24/7 Wall St..
Alphabet's Cloud Growth
Alphabet's Q2 revenue rose 24.2% to $119.80 billion with Google Cloud up 82% to $24.77 billion.
“demand for AI infrastructure and AI solutions”
Microsoft's Azure Growth
Microsoft's fiscal Q4 revenue reached $90.01 billion with Azure growing 43% and passing $100B annually.
“customer demand continues to exceed available capacity”
AI Adoption Signals
Microsoft 365 Copilot passed 30 million paid seats while Google Cloud has 950 million Gemini App users.
Weak Spots
Alphabet faces declining personal computing and negative free cash flow of $5.86 billion while Microsoft has strong cash flow.
Microsoft Hosts Models
Microsoft offers over 11,000 AI models from OpenAI, Anthropic, and its own MAI family.
“you've got to keep your harness separate from the model”
Alphabet's Stock Sales
Alphabet raised $70 billion in equity and debt to fund its $175 to $185 billion capex plan.
Funding Race to $5 Trillion
Alphabet's cloud backlog of $460 billion must turn to revenue before its capex plan pays off.
What matters most
Alphabet's faster cloud growth and stock sales face Microsoft's AI cash flow advantage in the race to $5 trillion.
