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One free scan finds every outdated or missing driver and matches the right update for your exact hardware.Free scan · exact hardware matchCompare Microsoft and Apple as businesses first, then compare the prices investors are paying for their shares. A company’s growth, margins, cash generation and risks help assess its quality; valuation determines how much of that quality may already be reflected in the stock price. The available company filings show different business mixes and fiscal periods, but do not establish which shares are cheaper today or which will deliver the higher long-term return.
Start with the fiscal-year dates
Microsoft and Apple do not report on matching annual calendars, so label each figure by company and period rather than treating the numbers as a same-date comparison. Microsoft FY2025 ended June 30, 2025; Apple FY2025 ended September 27, 2025. Microsoft has also reported FY2026 cloud metrics, but the cited materials do not establish Apple FY2026 annual results.
Microsoft’s FY2025 Annual Report reported revenue of $281.7 billion, up 15%, and operating income of $128.5 billion, up 17%. Azure revenue exceeded $75 billion for the first time. Apple’s FY2025 Form 10-K reported net sales of $416.161 billion, up 6%. These headline totals describe differently sized businesses with different product and service mixes; they are not, by themselves, a measure of relative investment appeal.
Compare what each company sells
Microsoft: cloud, software and a broader portfolio
Microsoft earns revenue from cloud-based services, software licensing and support, advertising, devices, gaming, and other activities. Microsoft Cloud revenue reached $168.9 billion in FY2025, up 23%, according to its FY2025 Annual Report. That gives investors a large cloud business to examine alongside its productivity and business software and other operations.
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Microsoft Investor Relations’ FY2026 metrics report Microsoft Cloud revenue of $214.4 billion and 40% growth in Azure and other cloud services for FY2026. The company’s FY2026 Q4 earnings release separately reports 43% year-over-year growth in Azure and other cloud services revenue for that quarter. The 40% figure is an annual growth metric; 43% is a quarterly year-over-year rate, so they should not be substituted for one another. See Microsoft’s FY2026 metrics and FY2026 Q4 earnings release.
Apple: iPhone-led hardware with a substantial services business
Apple designs, manufactures and markets smartphones, computers, tablets, wearables and accessories, as well as related services. Its FY2025 Form 10-K reports this sales mix for the year ended September 27, 2025:
| Apple FY2025 category | Net sales | Share of total net sales | Year-over-year context |
|---|---|---|---|
| iPhone | $209.586 billion | About 50.4% | Largest reported category |
| Services | $109.158 billion | About 26.2% | Up 14% |
| Mac | $33.708 billion | About 8.1% | Not stated in the cited summary |
| iPad | $28.023 billion | About 6.7% | Not stated in the cited summary |
| Wearables, Home and Accessories | $35.686 billion | About 8.6% | Down 4% |
Shares of total are calculated from the company-reported category and total figures, and are rounded. Apple’s total net sales were $416.161 billion, up 6%. The filing’s category mix makes iPhone exposure clear, while Services was a substantial business growing faster than total sales in that fiscal year. A category’s size or growth rate alone does not establish how durable it will be.
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Assess growth without extending one year indefinitely
For a long-term comparison, look for multi-year trends in revenue, segment performance and operating results using each company’s filings. The figures above offer useful reference points, not a forecast: Microsoft reported FY2025 Microsoft Cloud growth of 23% and FY2026 Azure and other cloud services growth of 40% for the full year; Apple reported 14% Services growth and 6% total net-sales growth in FY2025. The periods differ, and neither company’s reported rate should simply be projected forward.
Also look for evidence that growth is broad or concentrated. Microsoft’s portfolio spans several business areas, while Apple’s FY2025 product-category table shows iPhone as its largest source of sales. Concentration is an exposure to understand, not an automatic mark against a company: an investor should consider whether the business can sustain demand, adapt to competition and convert sales into earnings and cash.
Examine profitability, cash needs and reinvestment
Compare operating income and operating cash flow from the companies’ filings, using the same definitions and fiscal periods where possible. Microsoft reported FY2025 operating income of $128.5 billion. That figure is a starting point for evaluating profitability, but it should be read alongside the company’s ongoing investment requirements.
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Microsoft says expansion of data centers, servers and AI infrastructure can raise costs and pressure operating margins. Apple’s filing discusses different operating demands, including product and services economics, component and manufacturing considerations, and supplier commitments. Neither company’s headline sales total tells you how much cash remains after the investment required to compete.
Apple reported $56.2 billion in manufacturing purchase obligations as of September 27, 2025, of which $55.4 billion was payable within 12 months. These obligations help illustrate the scale and timing of commitments in its supply chain; they are not equivalent to a forecast of operating costs or a direct comparison with Microsoft’s infrastructure spending.
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Microsoft reported returning $37.7 billion to shareholders through dividends and repurchases in FY2025, while describing continued investment in cloud and AI infrastructure. Apple reported $132.4 billion in cash, cash equivalents and marketable securities as of September 27, 2025, alongside its capital return program. The balance-sheet amount and Microsoft’s annual cash-return figure measure different things and should not be read as a direct contest in shareholder value.
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For each company, examine dividends and buybacks together with investment needs and changes in shares outstanding. A repurchase can return capital, but its per-share benefit depends in part on the price paid and on shares issued or otherwise added to the count. A large cash balance does not, by itself, show that a stock is undervalued.
Compare risks that could change the long-term case
Company filings identify risks management considers relevant; they do not assign independent probabilities to those risks. Microsoft identifies intense competition, changing customer preferences, macroeconomic and geopolitical conditions, and constraints involving infrastructure, energy, land and supply. Its planned infrastructure investment also creates execution and cost considerations.
Apple identifies competition, frequent product introductions and transitions, customer acceptance, regulation and market access. Its FY2025 filing also reports that Greater China net sales decreased, primarily because of lower iPhone sales, while other regions recorded increases from different product and services combinations. That regional variation is a reminder to examine business performance by geography as well as by product category.
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To make the risks useful in an investment decision, ask what evidence would weaken your expectations: slower cloud adoption or rising infrastructure costs for Microsoft, for example, or weaker product demand, an unsuccessful product transition or tighter market access for Apple. These are questions for monitoring, not claims that a particular outcome is certain.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Put valuation between business quality and expected return
A strong business is not automatically a strong investment at every price. To compare expected returns, use share prices from the same date and specify the valuation measure—such as a price-to-earnings or enterprise-value measure—along with the assumptions behind future revenue, margins, cash flow and share count. Compare like with like, and state whether figures are trailing, forward-looking or based on another period.
The company reports cited here do not provide a synchronized current share-price snapshot or establish current valuation multiples. Historical operating performance alone therefore cannot support a current claim that Microsoft or Apple is the cheaper stock or the better buy. Nor does the business history alone establish a future return; that depends on the price paid and on results relative to the expectations embedded in that price.
A practical comparison checklist
- Align the periods. Record each figure’s fiscal year or quarter and report date; do not compare Microsoft FY2026 annual metrics with Apple FY2025 figures as if they cover the same period.
- Map the revenue mix. Identify each company’s largest businesses and how concentrated sales are, then consider whether growth comes from multiple areas or a few major ones.
- Check the trajectory. Review multi-year sales, segment and profitability trends in company filings. Treat one-year growth rates as historical observations, not perpetual forecasts.
- Follow cash and investment. Compare operating cash flow, capital needs, supplier or infrastructure commitments, dividends, repurchases and changes in shares outstanding using consistent definitions.
- List the risks that matter to your assumptions. Separate risks named by management from your own assessment of their likelihood and financial impact.
- Set a valuation framework. Use prices from one date for both shares, explain the valuation measure and assumptions, and test how the conclusion changes if growth or margins disappoint.
- Fit the decision to your portfolio. Consider your time horizon, tolerance for volatility, existing holdings and whether owning both would diversify or deepen exposures you already have.
This process can produce a reasoned comparison, but not a universal winner. A conclusion depends on the investor’s valuation assumptions, risk tolerance, horizon and portfolio context.
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