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Microsoft vs. Apple stock is not a choice between identical technology businesses. Microsoft’s latest reported results are led by software, cloud and AI infrastructure, while Apple still gets most of its sales from the iPhone, with Services providing a large secondary stream. A useful comparison therefore weighs growth, revenue mix, operating profitability, reinvestment, concentration and valuation on the same date—not simply which company reports the larger dollar profit.
Microsoft’s fiscal 2026 ended June 30, 2026, and Apple’s fiscal 2026 ended September 26, 2026, so the figures below are clearly labeled rather than treated as co-terminous. The filings show two highly profitable companies, but neither set of results establishes which stock is suitable for every investor.
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At a glance
| Name | Best for | Key FY2026 specification | Revenue mix and main exposure | Checked |
|---|---|---|---|---|
| Microsoft | Investors seeking broad enterprise software, cloud and AI exposure | $331.839 billion revenue; $155.237 billion operating income; Microsoft Cloud revenue of $214.4 billion | Productivity and Business Processes, Intelligent Cloud and More Personal Computing; exposure to Azure demand, data-center capacity and AI infrastructure costs | November 2026 |
| Apple | Investors seeking an integrated hardware-and-services ecosystem with a substantial installed base | $478.834 billion net sales; $158.063 billion operating income; $132.175 billion net income | iPhone sales of $254.098 billion and Services sales of $123.301 billion; exposure to product cycles, competition and geographic concentration | November 2026 |
Prices checked November 2026.
The figures in the table come from Microsoft’s FY2026 annual report, Microsoft’s FY2027 first-quarter Form 10-Q, and Apple’s FY2026 consolidated financial statements.
What is the core difference between Microsoft and Apple stock?
Microsoft is primarily a recurring-revenue software and cloud platform company that is adding AI capacity. Apple is primarily a premium consumer-device company whose iPhone remains the largest sales category, supported by Services, Mac, iPad and Wearables, Home and Accessories. That difference changes what an investor must monitor: Microsoft’s demand, capacity and margin economics versus Apple’s product cycles, upgrade behavior, ecosystem monetization and regional sales.
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Microsoft reports three operating segments. Productivity and Business Processes generated $139.996 billion of FY2026 revenue and $83.879 billion of operating income. Intelligent Cloud generated $137.791 billion of revenue and $56.972 billion of operating income. More Personal Computing generated $54.052 billion of revenue and $14.386 billion of operating income. Segment labels are company-specific and should not be treated as directly equivalent to Apple’s categories.
Apple reports product categories rather than Microsoft-style operating segments. In the twelve months ended September 26, 2026, iPhone produced $254.098 billion, Mac $37.929 billion, iPad $27.929 billion, Wearables, Home and Accessories $35.577 billion, and Services $123.301 billion. iPhone was still Apple’s largest category, although Services was large enough to materially affect the company’s economics.
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Microsoft reported FY2026 revenue of $331.839 billion, up 18%, and operating income of $155.237 billion, up 21%, in its FY2026 annual report. Microsoft Cloud revenue rose 27% to $214.4 billion, while Azure and other cloud services revenue grew 41%.
| Microsoft FY2026 measure | Reported result | How to interpret it |
|---|---|---|
| Total revenue | $331.839 billion, up 18% | Shows company-wide scale and growth across all three segments. |
| Operating income | $155.237 billion, up 21% | Indicates substantial operating profitability before financing and tax effects. |
| Microsoft Cloud revenue | $214.4 billion, up 27% | Cloud is the central growth and investment engine, but the label includes several cloud services. |
| Azure and other cloud services | Revenue up 41% | Faster growth than Microsoft Cloud overall, highlighting Azure momentum. |
| Productivity and Business Processes | $139.996 billion revenue; $83.879 billion operating income | Includes major productivity and business-software franchises. |
| Intelligent Cloud | $137.791 billion revenue; $56.972 billion operating income | Captures cloud and server-related economics, including Azure. |
| More Personal Computing | $54.052 billion revenue; $14.386 billion operating income | Provides a smaller, more consumer-facing part of Microsoft’s mix. |
Microsoft’s FY2027 first-quarter filing gives a more recent direction-of-travel check: Microsoft Cloud revenue was $63.9 billion, up 30%, and Azure revenue grew 48%. Those figures are from a subsequent quarter, not a restatement of FY2026, and they should be compared with Apple data from a clearly identified period.
What were Apple’s latest reported results?
Apple reported FY2026 net sales of $478.834 billion, gross margin of $233.602 billion, operating income of $158.063 billion and net income of $132.175 billion for the year ended September 26, 2026. Apple’s FY2026 diluted earnings per share was $8.98, according to its consolidated financial statements.
| Apple FY2026 category or measure | Reported result | Why it matters |
|---|---|---|
| Net sales | $478.834 billion | Apple’s total sales base across products and Services. |
| Gross margin | $233.602 billion | Amount left after cost of sales, before operating expenses. |
| Operating income | $158.063 billion | Profit from operations before non-operating items and tax. |
| Net income | $132.175 billion | Bottom-line profit attributable after all reported expenses. |
| iPhone | $254.098 billion | Largest category; product-cycle and upgrade execution remain critical. |
| Services | $123.301 billion | Large recurring and transactional ecosystem category, but still smaller than iPhone. |
| Mac | $37.929 billion | Computer business tied to product launches and broader PC demand. |
| iPad | $27.929 billion | Tablet category with its own replacement and competitive dynamics. |
| Wearables, Home and Accessories | $35.577 billion | Diversifies the device portfolio but remains below iPhone and Services. |
Apple’s 2026 Form 10-K says revenue proportions were generally consistent across reportable segments, with Greater China showing a moderately higher iPhone share and a moderately lower Services share. That geographic mix makes China-specific demand and policy developments important variables rather than details to ignore.
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How do the companies’ growth engines compare?
Microsoft’s reported growth is currently more concentrated in cloud and AI capacity. Apple’s growth must be assessed across a hardware launch cycle and Services monetization, with iPhone still the largest contributor.
Microsoft: cloud growth with capacity demands
The 41% FY2026 growth in Azure and other cloud services and the 48% Azure growth reported for FY2027’s first quarter indicate strong demand in the disclosed periods. Microsoft also says Intelligent Cloud cost of revenue grew 44%, driven in part by AI infrastructure investment, and that segment gross-margin percentage declined amid those investments and sales-mix changes.
This creates a two-sided question. Faster Azure and AI demand can expand the addressable market and support recurring revenue, but servers, networking, energy, data-center land and other capacity are expensive and must be available when customers need them. Microsoft identifies dependence on predictable energy, networking supplies, servers and components. A growth investor should therefore track both revenue growth and the cost required to deliver it.
Apple: product cycles plus Services
Apple’s $254.098 billion iPhone sales show why launch timing, installed-base upgrades, pricing, channel inventory and competitive products matter. Services at $123.301 billion provides a substantial second engine, but it does not remove the company’s exposure to iPhone demand. Mac, iPad and Wearables, Home and Accessories add breadth, although none individually matched iPhone’s FY2026 sales.
Apple’s filings support examining category and regional trends without assuming that one year’s mix will persist. A comparison should ask whether growth comes from units, price, mix, Services activity or acquisitions, and whether those drivers are repeatable.
Are Microsoft and Apple equally profitable?
Both companies are exceptionally profitable, but their reported profit lines are shaped by different businesses and accounting effects. Using the disclosed FY2026 figures, Microsoft’s operating income divided by revenue is approximately 46.8%, while Apple’s is approximately 33.0%; Apple’s gross margin divided by sales is approximately 48.8%. These are simple calculations from company-reported totals, not independently produced estimates, and they are affected by different fiscal year-ends and business mixes.
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Microsoft’s FY2026 net income and diluted EPS also included a positive effect from net gains on OpenAI investments: Microsoft disclosed a $5.0 billion increase to net income and a $0.67 increase to diluted EPS. That investment gain is not the same as recurring revenue or operating profit. When comparing earnings quality, an investor can calculate an adjusted view that excludes the disclosed gain, while keeping the reported figure visible and explaining the adjustment.
For Apple, start with operating income, net income and gross margin, then examine how much profit is generated by products versus Services and how that mix changes over time. A higher gross margin does not automatically mean a lower-risk business: hardware revenue can be sensitive to launches, component costs, foreign exchange and consumer spending.
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Compare operating cash flow, capital expenditures, free cash flow and balance-sheet commitments from both companies’ full filings for the same measurement dates. Do not infer superior cash generation from revenue or operating income alone.
For Microsoft, specifically separate the economics of serving cloud and AI demand from the reported growth rate. Infrastructure investment can raise depreciation, energy, leasing and operating costs and may pressure margins before capacity produces revenue. The company’s disclosure about data-center land, energy, networking supplies, servers and components is a useful checklist for execution risk.
For Apple, examine capital expenditures, supply-chain commitments, research and development, inventory and the cash returned through dividends and repurchases. Apple’s integrated hardware model can require substantial manufacturing and component planning even when much production is outsourced. Services may have different incremental economics from devices, so a rising Services share can alter the overall margin profile.
Use a common period and consistent definitions. Free cash flow is not always presented identically, and capital expenditures can be classified differently. If you calculate it, state the formula—typically operating cash flow minus capital expenditures—and use figures from the companies’ filings rather than mixing a trailing period for one company with a fiscal year for the other.
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What concentration and execution risks should an investor examine?
Apple’s concentration risk: iPhone represented roughly 53% of FY2026 sales when its $254.098 billion category revenue is divided by $478.834 billion of total sales. That arithmetic illustrates the dependence; it does not predict the next year. Product launches, upgrade timing, premium pricing, competition, carrier policies and Greater China exposure can all affect results.
Microsoft’s infrastructure and platform risk: Microsoft’s revenue is spread across three reported segments, but the growth narrative is heavily tied to cloud and AI demand. Capacity shortages, energy availability, component supply, customer concentration, cybersecurity incidents, regulatory requirements and rising infrastructure costs could affect delivery or margins. Software subscriptions also face competition and renewal risk even when the model is recurring.
Shared risks: Both companies face foreign-exchange movements, regulation, antitrust scrutiny, intellectual-property disputes, cybersecurity threats, macroeconomic slowdowns and the possibility that new products or services do not earn expected returns. A diversified revenue chart does not eliminate company-specific execution risk.
How do you compare Microsoft and Apple valuation without stale numbers?
The filings in the available data do not provide a current share price, market capitalization, enterprise value, analyst consensus or valuation multiple. Because those data change daily, obtain both companies’ figures on one stated date and identify the market-data source before drawing a conclusion.
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- Record the same-date price and share count. Multiply price by diluted shares outstanding to estimate market capitalization, using a consistent share-count date.
- Calculate enterprise value consistently. Start with market capitalization, then add debt and other claims and subtract cash and cash equivalents according to the chosen data definition. Apply the same definition to both companies.
- Use several earnings measures. Compare trailing P/E using reported earnings, forward P/E using a named estimate source, and EV-to-operating-income or EV-to-free-cash-flow where the inputs are available.
- Check the denominator’s quality. Microsoft’s FY2026 earnings include the disclosed OpenAI investment gain, so note whether a multiple uses reported or adjusted earnings. For Apple, specify whether the denominator is a completed fiscal year, a trailing twelve months or an estimate.
- Stress-test expectations. Ask what growth, margin and cash-flow assumptions the price implies. A strong company can be an unattractive stock if the valuation already assumes unusually high growth or flawless execution.
Do not compare Microsoft’s share price with Apple’s share price as if the lower-priced share were cheaper. Stock splits, share counts and capital structures make per-share prices meaningless without the underlying valuation and earnings data.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Which stock fits which type of investor?
There is no universal winner. Suitability depends on time horizon, risk tolerance, portfolio concentration, income needs and the type of exposure an investor wants.
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| Investor question | Points toward Microsoft | Points toward Apple |
|---|---|---|
| What growth exposure do you want? | Enterprise software, cloud consumption and AI infrastructure. | Device upgrades, ecosystem engagement and Services. |
| What concentration are you comfortable with? | Revenue is distributed across three reported segments, although cloud and AI are major themes. | Greater dependence on iPhone, with Services and other devices providing diversification. |
| What execution risk concerns you most? | Data-center capacity, energy, components, infrastructure spending and cloud competition. | Product-cycle timing, consumer demand, supply chain, competition and regional exposure. |
| What earnings adjustment matters? | Separate the $5.0 billion OpenAI investment gain from recurring operating performance. | Separate product gross-margin movements from category and Services growth. |
| What portfolio role are you considering? | A large-cap software/cloud holding, subject to valuation and technology concentration. | A large-cap consumer hardware-and-services holding, subject to product and geographic concentration. |
This framework is not a personal recommendation. An investor who already owns several software companies may view Microsoft’s exposure differently from someone whose portfolio is dominated by consumer electronics. Likewise, an investor needing current income should examine dividend policy and yield using current data, not assume that a profitable company automatically meets an income objective.
What is a practical Microsoft-versus-Apple comparison checklist?
- Align the dates. Label Microsoft FY2026 as ending June 30, 2026, and Apple FY2026 as ending September 26, 2026. Add a common trailing-twelve-month or calendar-period view only when reliable data are available.
- Map the revenue engines. For Microsoft, track Productivity and Business Processes, Intelligent Cloud and More Personal Computing. For Apple, track iPhone, Services, Mac, iPad and Wearables, Home and Accessories.
- Separate growth from investment. Put Azure and Microsoft Cloud growth beside the associated infrastructure-cost disclosures. Put Apple category growth beside launch timing, geography and product-cycle assumptions.
- Reconcile profit quality. Identify unusual items, especially Microsoft’s disclosed OpenAI investment gain, and distinguish operating income from non-operating investment results.
- Review cash and reinvestment. Compare operating cash flow, capital expenditures, free cash flow, research and development and shareholder returns using consistent filing definitions.
- Build a valuation snapshot. Capture market capitalization, enterprise value, trailing and forward multiples on the same date and record the estimate source.
- Run a downside case. Consider slower cloud demand or higher infrastructure costs for Microsoft; weaker iPhone upgrades, Greater China pressure or lower Services growth for Apple.
- Match the decision to your portfolio. Check position size, sector overlap, time horizon and tolerance for hardware, cloud and AI volatility before buying either stock.
What should you monitor after buying either stock?
For Microsoft, monitor Azure growth, Microsoft Cloud growth, Intelligent Cloud gross margin, infrastructure spending, capacity commentary and whether AI revenue is covering the cost of expansion. Also distinguish operating results from changes in the value of strategic investments.
For Apple, monitor iPhone revenue and mix, Services growth, gross margin, Greater China performance, installed-base monetization and the timing and reception of major product launches. Watch whether Services growth is broad-based or offsetting weakness in a particular device category.
For both companies, read the next annual and quarterly filings rather than relying on a single headline number. Recheck valuation after material price moves, because a company’s operating outlook can remain unchanged while its expected return changes substantially at a different share price.
How we compared Microsoft and Apple
The comparison uses the companies’ reported FY2026 financial statements and Microsoft’s subsequent FY2027 first-quarter filing. Selection criteria were revenue growth and mix, operating profitability, quality of earnings, reinvestment requirements, concentration and execution risks, valuation methodology, and fit with different investor objectives. Reported figures are company disclosures; they are not the result of independent product, market or investment-performance testing.
Frequently Asked Questions
Should I use revenue growth or earnings growth to compare these stocks?
Use both, then reconcile them with margins and cash flow. Revenue growth can accelerate while infrastructure, component or research costs absorb the benefit, and earnings can be distorted by non-operating items such as Microsoft’s disclosed investment gain.
Does Apple’s Services business make it a software company?
No. Services is a major Apple category, but the company still relies heavily on hardware economics and the iPhone ecosystem. Evaluate Services growth and margins as a complement to, not a replacement for, product-cycle analysis.
Can I compare Microsoft Cloud revenue directly with Apple Services revenue?
You can compare their scale only as a descriptive exercise, not as like-for-like segments. Microsoft Cloud aggregates several cloud offerings, whereas Apple Services is a category within a consumer-device ecosystem, with different accounting, customers and cost structures.
What is the safest way to update the valuation comparison?
Capture both stocks’ prices, share counts, cash, debt and the same trailing or forward earnings date in one worksheet. Record the retrieval date and estimate source, then recalculate after major earnings releases or large market moves.
