Alphabet’s stock is up about 6% in morning trading, while Microsoft’s is off a little more than 3.6%. The Exchange explores startups, markets and money.

Microsoft's revenue rose 17% year over year while Alphabet's increased 15%. Comparing net income increases isn't fair, as Alphabet's comparison quarter in Q1 2023 is very weak.

Both Microsoft and Alphabet surpassed analyst expectations for earnings per share and revenue, sometimes by a fairly hefty margin. Microsoft reported EPS of $2.93 versus expectations of $2.78.

Microsoft has a 12-month forward price-to-earnings ratio of 30.40, compared with Alphabet's 21.63. Some analysts believe the more premium valuation was justified.

Microsoft kicked off the AI arms race following a $10 billion investment in OpenAI, the developer of ChatGPT. Not long after, Alphabet debuted its own large language model (LLM) called Bard.

However, both stocks have fallen from their July peaks of $191.18 for Alphabet and $467.56 for Microsoft, reflecting broader market challenges that impacted mega-cap tech companies over the summer.

Microsoft CEO Satya Nadella ·Fortune·Fabrice COFFRINI / AFP) (Photo by FABRICE COFFRINI/AFP via Getty Images Sharon Goldman Updated Wed, Oct 30, 2024, 7:42 PM2 min read In this article: MSFT GOOG ...

Microsoft has beat on earnings 3 quarters in a row. But even more impressively, it only has one earnings miss in the last 5 years, which includes, of course, the pandemic. That rare miss was in 2022.

Key Points Microsoft and Google parent Alphabet are locked in a fierce battle in the realm of AI. Each company is integrating AI into as many of its business segments as possible.

However, a big difference between the two is Microsoft’s dividend; MSFT’s annual dividend currently yields 1%, whereas Alphabet doesn’t pay dividends.