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Alphabet reported faster year-over-year revenue growth than Microsoft in their latest results for the quarter ended June 30, 2026. Alphabet’s revenue rose 24%, compared with Microsoft’s 18%, and Google Cloud grew 82%, compared with 43% growth in Microsoft’s Azure and other cloud services. Microsoft’s case is different: it reported substantial cloud revenue, Azure annual revenue above $100 billion for FY2026, and a large commercial commitment backlog. The stronger growth story depends on whether you prioritize current growth rates or scale and contracted demand; neither company’s results alone establish which will deliver better long-term returns.
How the two companies compare
Alphabet announced its second-quarter 2026 results on July 22; Microsoft announced its fiscal fourth-quarter 2026 results on July 29. Both quarters ended June 30, but the companies use different fiscal-quarter labels. The figures below are company-reported year-over-year results, not forecasts.
| Measure | Alphabet | Microsoft |
|---|---|---|
| Quarterly revenue | $119.8 billion, up 24% (23% in constant currency) | $90.0 billion, up 18% (17% in constant currency) |
| Cloud growth measure | Google Cloud: $24.8 billion, up 82% | Azure and other cloud services: revenue up 43%; Microsoft Cloud: $59.3 billion, up 27% |
| Other major growth base | Google Services: $94.5 billion, up 15% | Productivity and Business Processes: $37.8 billion, up 14% |
| Forward-demand indicator | Not stated in the cited quarterly figures | Commercial remaining performance obligation: $678 billion, up 84%; this is contracted future performance, not revenue already recognized |
Cloud figures require care: Google Cloud and Microsoft Cloud are each company-defined measures, and Microsoft’s Azure growth rate is a separate measure from Microsoft Cloud revenue growth. Their scope is not established as identical, so comparing growth rates is more defensible than treating the reported cloud revenue totals as like-for-like.
What is driving Alphabet’s growth?
Google Services provides the larger base
Google Services generated $94.5 billion, up 15%. Within it, Search and other grew 17%, subscriptions, platforms, and devices grew 15%, and YouTube advertising grew 13%. Google Network revenue was $7.3 billion, compared with $7.4 billion a year earlier, so it was not a growth engine in this quarter.
This mix matters: Alphabet’s growth is not solely a cloud story. Its much larger Services business continued to expand across Search, YouTube ads, and subscriptions. CEO Sundar Pichai attributed growth in Search queries in part to AI features, but that is management’s explanation, not an independently measured estimate of AI’s contribution.
Google Cloud is the fastest-growing reported segment
Google Cloud revenue reached $24.8 billion, up 82%. Alphabet attributed the acceleration to enterprise AI solutions, enterprise AI infrastructure, and core Google Cloud Platform services. The company therefore has a high-growth cloud business alongside its substantially larger Services base. The quarterly release does not isolate how much of Cloud’s revenue growth came specifically from AI.
What is driving Microsoft’s growth?
Cloud and business software lead
Microsoft reported $39.3 billion in Intelligent Cloud revenue, up 32%, with Azure and other cloud services revenue up 43%. Microsoft Cloud revenue was $59.3 billion, up 27%. For FY2026, Microsoft said Azure revenue exceeded $100 billion, giving the cloud growth rate a substantial annual business behind it.
Growth also extends into commercial software and services. Productivity and Business Processes revenue rose 14% to $37.8 billion. Microsoft 365 Commercial cloud revenue grew 14% as reported (16% after adjusting for a prior-year revenue-recognition comparison); LinkedIn grew 12%, and Dynamics 365 grew 13%. Microsoft said Microsoft 365 Copilot had more than 30 million paid seats, a measure of adoption rather than a direct breakdown of AI revenue.
Commercial commitments add a forward-looking signal
Commercial remaining performance obligation (RPO) grew 84% to $678 billion. RPO is a forward contractual-demand indicator: it represents contracted work to be performed in the future, not revenue recognized in the quarter or a guarantee that the entire amount will be recognized immediately. Its size and growth strengthen Microsoft’s demand evidence, but it should not be added to current revenue or compared directly with a quarter’s sales.
Not every Microsoft segment is growing
More Personal Computing revenue fell 4% to $12.9 billion. Windows OEM and Devices fell 7%, while Xbox content and services fell 10%; search advertising revenue excluding traffic acquisition costs rose 10%, providing a smaller offset within the segment. Microsoft’s growth is consequently concentrated in cloud and business software rather than uniform across the company.
What growth rates do—and do not—say about scale
Alphabet’s 82% Google Cloud growth is faster than Microsoft’s 43% Azure and other cloud services growth, but percentage growth on a smaller base does not mean an equivalent amount of new revenue. Alphabet’s reported Google Cloud quarterly revenue was $24.8 billion. Microsoft reported $59.3 billion for its broader Microsoft Cloud measure, while Azure alone exceeded $100 billion in annual revenue in FY2026. Because the measures differ, these figures indicate scale and momentum without creating a precise like-for-like cloud ranking.
The same distinction applies to the overall companies. Alphabet’s quarterly revenue growth rate was higher, while Microsoft’s revenue base and annual Azure scale show that slower percentage growth can still accompany a very large business. Microsoft’s RPO adds evidence of contracted demand, but it is not realized sales.
Profitability and investment affect the quality of growth
Alphabet reported Q2 operating income growth of 30% and an operating margin of 34%. Those operating figures are more useful for assessing business performance than the quarter’s net-income or earnings-per-share increase: Alphabet reported a $98.0 billion net gain, primarily from unrealized gains on equity securities, which amplified those bottom-line increases.
Both growth stories depend on continued investment, particularly in cloud and AI infrastructure. Microsoft identifies substantial cloud and AI investment as a business risk shaped by customer demand, technological developments, competition, and regulation. The cited company results do not provide directly comparable AI revenue attribution, capital-expenditure forecasts, or returns on AI investment for the two firms. Faster reported growth therefore does not settle which business will turn its investment into stronger long-run returns.
Which business has the stronger growth drivers?
On the reported results for the quarter ended June 30, 2026, Alphabet had the stronger near-term growth rates: revenue grew faster overall, and Google Cloud grew faster than Azure and other cloud services. Its Services business also delivered 15% growth on a much larger base than Google Cloud.
Microsoft presents a compelling alternative growth profile: Azure and business software are expanding, Azure exceeded $100 billion in FY2026 revenue, and commercial RPO points to substantial contracted future work. Its weaker point is the decline in More Personal Computing. For a personal-finance reader comparing business momentum, the clearest conclusion is that Alphabet led on reported growth rates while Microsoft paired strong cloud and productivity growth with larger cloud scale and a sizable commitment backlog. That is a comparison of operating momentum, not a prediction of future performance or an investment recommendation.
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