Alphabet: Expanding Its Revenue Base
Alphabet (GOOGL +0.39%) (GOOG +0.59%) primarily earns revenue by offering digital advertising products, cloud computing infrastructure, and various software platforms to users and enterprises across global markets.
While it reported no major operational milestones or adverse events early this year, it recorded approximately 30% net income margin for the quarter ended Dec. 31, 2025.
Microsoft: Steady Revenue Trajectory
Microsoft (MSFT 0.46%) primarily generates revenue by licensing enterprise software, operating a cloud computing platform, and selling personal computing devices and gaming content worldwide.
It recently introduced intelligent automation tools for the retail sector and faced new securities law investigations, while posting approximately 47% net income margin for the quarter ended Dec. 31, 2025.
Why Revenue Matters for Retail Investors
Revenue here refers to the data provider’s standardized income-statement revenue line item, which serves as a baseline indicator of customer demand by showing exactly how much money the business brings in from its core operations before any expenses are deducted.
Quarterly Revenue for Alphabet and Microsoft
| Quarter (Period End) | Alphabet Revenue | Microsoft Revenue |
|---|---|---|
| Q1 2024 (March 2024) | $80.5 billion | $61.9 billion |
| Q2 2024 (June 2024) | $84.7 billion | $64.7 billion |
| Q3 2024 (Sept. 2024) | $88.3 billion | $65.6 billion |
| Q4 2024 (Dec. 2024) | $96.5 billion | $69.6 billion |
| Q1 2025 (March 2025) | $90.2 billion | $70.1 billion |
| Q2 2025 (June 2025) | $96.4 billion | $76.4 billion |
| Q3 2025 (Sept. 2025) | $102.3 billion | $77.7 billion |
| Q4 2025 (Dec. 2025) | $113.9 billion | $81.3 billion |
Data source: Company filings.
Foolish Take
A notable trend among Magnificent Seven stocks is the revenue acceleration of Google parent Alphabet, particularly against its cloud competitor, Microsoft.
In the latest quarter, revenue growth was about the same for each company, 18% for Alphabet versus 17% for Microsoft.
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However, as previously mentioned, Alphabet continues to grow its revenue base at a more rapid clip, and the difference seems to come from the cloud. While Microsoft’s cloud revenue rose by 26%, Google Cloud increased its revenue by a staggering 48%!
Admittedly, Microsoft remains the leader in this space, generating $51.5 billion in quarterly revenue from the cloud compared to $17.7 billion for Google Cloud. Also, the fact that smaller businesses can more easily achieve higher-percentage growth could explain some of that success.
Nonetheless, for all of the talk of the demise of Alphabet’s digital advertising business, its revenue still rose by 14%. In comparison, Microsoft’s more personal computing segment, which includes Windows, experienced a 3% decline.
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Thus, the state of legacy businesses as well as cloud growth appear to be significant factors in the Google parent’s revenue acceleration compared to its cloud rival.
Data source: Company filings. Data as of April 8, 2026.
