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Random freezes, missing sound and display glitches usually trace back to one bad driver. Find and replace yours safely.Free scan · under a minuteMicrosoft and Apple have very different business mixes: Microsoft sells cloud services, software and productivity tools across commercial and consumer markets, while Apple depends more heavily on devices—especially the iPhone—with Services as a substantial second sales category. Their FY2025 filings offer a dated comparison of scale and business mix, but they do not establish which stock is more attractive: that also depends on current prices, expectations and an investor’s circumstances.
How Microsoft and Apple make money
Microsoft combines commercial software, cloud and consumer businesses
Microsoft groups its FY2025 operations into Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. Across those areas, it sells cloud computing and server software, productivity and business applications, LinkedIn, Dynamics, Windows, gaming, devices and advertising. Its FY2025 annual report identifies cloud and AI as important areas for growth and investment.
This mix reaches businesses and consumers through a range of products and services. That breadth can reduce dependence on a single product category, but it does not make Microsoft immune to concentration: cloud and AI infrastructure are increasingly important to its growth and margin outlook.
Apple pairs a large device business with Services
Apple sells iPhone, Mac, iPad, and Wearables, Home and Accessories, alongside Services. In Apple’s FY2025 statements, iPhone was by far the largest sales category and Services was a substantial second engine. The company’s results therefore remain closely connected to consumer device demand and the iPhone product cycle, even as Services adds another source of sales.
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What the FY2025 figures show
The figures below are from different fiscal calendars: Microsoft FY2025 ended June 30, 2025; Apple FY2025 ended September 27, 2025. They provide a common fiscal-year comparison, not a current-period stock analysis. Microsoft’s FY2026 Form 10-K had been filed by October 7, 2026, but its detailed figures are not included here.
| Measure | Microsoft FY2025 | Apple FY2025 |
|---|---|---|
| Top-line sales | Revenue: $281.724 billion | Net sales: $416.161 billion |
| Reported earnings measure | Operating income: $128.528 billion | Net income: $112.010 billion |
| Notable business figure | Microsoft Cloud revenue: $168.9 billion; Azure and other cloud services revenue grew 34% | iPhone net sales: $209.586 billion; Services net sales: $109.158 billion |
Sources: Microsoft Corporation FY2025 Annual Report and Apple Inc. FY2025 Form 10-K. Microsoft Cloud revenue was about 60% of Microsoft’s reported FY2025 revenue; iPhone sales were about 50% and Services about 26% of Apple’s FY2025 net sales. These are arithmetic shares calculated from the company-reported figures above, not separately reported company metrics.
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The earnings row is not an apples-to-apples profit comparison: Microsoft’s figure is operating income, while Apple’s is net income. Operating income is measured before certain items reflected later in net income, including taxes and financing effects. The table should not be read as showing which company is more profitable on a comparable basis. Nor do top-line sales totals alone establish the relative appeal of the shares.
How to read the difference in business mix
Concentration and customer demand
Apple’s large iPhone share makes product cycles and consumer demand central to its reported sales mix. A slower upgrade cycle or a shift in preferences could matter materially; that is an inference from the sales mix and the competitive risks Apple describes in its FY2025 filing, not a quantified forecast.
Microsoft reports activity across more product categories and commercial markets. Its mix is broader, but its reported emphasis on cloud and AI means infrastructure capacity and the economics of serving cloud customers matter increasingly to its growth and margins. Breadth and concentration are not binary: a company can have many businesses while still relying heavily on a few major growth engines.
Recurring business and investment needs
Microsoft’s portfolio includes software subscriptions and cloud consumption as well as other sales. Apple combines device purchases with Services. These are different customer relationships: a device purchase is tied to a product transaction, while subscriptions or ongoing cloud use can generate continuing revenue. The FY2025 figures here do not quantify comparable recurring-revenue shares, so they cannot establish which company has the more predictable revenue stream.
Growth also has an investment cost. Microsoft says scaling cloud and AI infrastructure can increase operating costs and pressure margins; its FY2025 report specifically notes Microsoft Cloud gross-margin pressure associated with scaling AI infrastructure. Apple’s filings describe substantial reliance on outsourced manufacturing and exposure to supply-chain conditions. The filings identify these burdens, but the figures above do not quantify a like-for-like investment comparison.
Risks that could affect each business and its shares
Microsoft risks
- Cloud and AI costs: Expanding infrastructure can raise operating expenses, and Microsoft reported Microsoft Cloud gross-margin pressure tied to AI infrastructure scaling in FY2025. If investment costs rise faster than the revenue or efficiency gains they support, margins could be affected.
- Competition and changing customer choices: Microsoft says its software, devices and cloud markets are competitive and that technologies and customer preferences change. Competition can affect demand, pricing and the ability to retain customers.
- Regulation: Microsoft’s FY2025 Form 10-K discusses competition enforcement and emerging AI laws that may create operational or cost effects.
- Geopolitical and infrastructure exposure: The filing also describes trade restrictions, tariffs and export controls, alongside the need for land, energy, networking and computing components to expand data-center capacity. Constraints in these areas could complicate or increase the cost of expansion.
Apple risks
- Product and ecosystem concentration: iPhone is Apple’s largest FY2025 sales category. A weaker upgrade cycle, changing preferences or competition could weigh on results; this risk implication follows from the reported mix and Apple’s stated competitive risks.
- Manufacturing and supply chains: Apple says a significant majority of its manufacturing is performed in whole or in part by outsourcing partners, with a large concentration in Asian countries. Disruptions or changes in supplier access can affect production and product availability.
- Tariffs and trade restrictions: Apple’s FY2025 filing says tariffs and other restrictions may increase costs, constrain component or product availability, require operational changes, or affect pricing and margins. Conditions can change after that filing, so it should not be treated as a live account of current trade measures.
- Regulation and legal proceedings: Apple identifies antitrust, privacy, digital-platform, AI and other evolving rules as relevant to its global business. Changes in law or legal outcomes could affect how products and services are offered or monetized.
A practical framework for comparing the stocks
Before deciding whether either stock fits a portfolio, compare the businesses and then bring in current valuation and personal circumstances. The company filings establish risk categories; how important each is relative to the other is an investor’s judgment, not a quantified forecast.
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- Examine revenue mix: Track how much sales depend on iPhone and other devices versus Microsoft’s cloud, software, productivity tools and advertising. Use current filings rather than assuming the FY2025 mix remains unchanged.
- Check growth against profitability: Look at business-line growth alongside operating income and margins. For Microsoft, pay attention to whether cloud and AI growth is accompanied by margin pressure from infrastructure spending.
- Assess the customer relationship: Distinguish continuing subscriptions or cloud use from periodic hardware purchases. Do not infer recurring-revenue shares when the reporting does not provide comparable figures.
- Consider investment requirements: Evaluate the resources needed to expand data centers and AI services, or to develop, manufacture and support devices. Compare disclosed measures only when they are genuinely comparable.
- Map geographic exposure: Consider where sales, manufacturing, suppliers and infrastructure are concentrated, and how trade restrictions or geopolitical events could affect them.
- Review competitive and regulatory pressure: Assess whether antitrust rules, AI regulation, platform rules or competitors could change product economics or customer access.
- Only then assess the shares: Compare current share prices with earnings expectations and other valuation evidence. The FY2025 operating and sales figures alone cannot tell you whether either stock is attractively priced.
What this comparison can—and cannot—tell you
The FY2025 filings support a business-level distinction: Apple’s sales are more concentrated in devices, particularly iPhone, while Microsoft spans more categories but is increasingly investing in cloud and AI infrastructure. They also identify different operational exposures, from Microsoft’s data-center capacity and competition risks to Apple’s outsourced manufacturing and trade exposure.
This is not a valuation comparison or a buy/sell recommendation. It does not include current share prices, market capitalizations, valuation multiples, relative returns, or Microsoft FY2026 financial detail. Those are necessary inputs for a current stock decision, and the right choice also depends on an investor’s time horizon, risk tolerance and portfolio.
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