Free tools Windows power users keep installed
One-click scans. No signup required.
iTechGuides is reader-supported. When you buy through links on our site, we may earn an affiliate commission. As an Amazon Associate I earn from qualifying purchases. Learn more
Neither Apple nor Microsoft can be called the better long-term stock from operating results alone. Apple’s latest reported quarter showed strong growth across devices and services, while Microsoft’s filings and results showed a rapidly expanding cloud business alongside heavy, uncertain AI investment. Without share prices and comparable valuation measures from the same date, the evidence does not establish which stock offers the better value at the current price.
What do Apple and Microsoft’s latest results show?
Their recent results point to different engines of growth, and they cover different reporting periods. Apple’s latest available quarterly release in the evidence reviewed is fiscal 2026’s third quarter, ended June 27, 2026. Microsoft’s cloud figures below include fiscal-year totals through fiscal 2026, while its quarterly Azure growth figure is from the quarter reported in July 2026.
| Company and period | Reported result | What it indicates |
|---|---|---|
| Apple, fiscal 2026 Q3, ended June 27, 2026 | Revenue of $109.4 billion, up 16% year over year; diluted EPS of $2.02, up 29%; gross margin of 50.1%. | Strong reported growth across the quarter, with tariff-refund benefits affecting both EPS and gross margin. |
| Microsoft, fiscal 2024–2026 | Microsoft Cloud revenue was $137.7 billion in FY2024, $168.9 billion in FY2025, and $214.4 billion in FY2026. | A multi-year expansion in the company’s cloud business, according to Microsoft’s FY2026 Form 10-K. |
| Microsoft, FY2026 results and quarter reported July 2026 | FY2026 revenue was $331.8 billion. In the reported quarter, Microsoft Cloud revenue was $59.3 billion and Azure and other cloud services revenue grew 43% year over year. | Associated Press reported these figures on Microsoft’s FY2026 results; the quarterly cloud and Azure figures are not directly comparable to Apple’s total quarterly revenue. |
Apple CEO Tim Cook described the fiscal 2026 June quarter as the company’s strongest June quarter, citing double-digit revenue growth across iPhone, Mac, Services, and geographic segments. That is management’s characterization of the results, not a forecast of future performance.
What is the long-term case for Apple?
Devices and services reinforce one another
Apple’s investment case centers on its consumer-device platform and the services attached to it. In its fiscal 2026 Q3 release, the company said iPhone, Mac, and Services each set June-quarter revenue records, with double-digit growth in each line. Sustaining that momentum depends on customers continuing to value the ecosystem, buying or upgrading devices, and using its services.
#1 Best Overall
Separate underlying performance from tariff refunds
The quarter’s 50.1% gross margin included an approximately two-percentage-point favorable effect from tariff refunds. Diluted EPS of $2.02 included $0.11 from those refunds. Those benefits help explain the reported figures, but they should not be treated as recurring operating growth when assessing the durability of margins or earnings.
AI is a product question as well as a monetization question
In the same release, Cook said Apple had introduced an “all-new Siri AI” at WWDC26. The announcement is evidence of product development, but the release did not quantify standalone AI sales or establish how much the feature will contribute to future revenue. For the investment case, the key question is whether AI makes Apple’s products more useful enough to support customer demand and ecosystem engagement.
Rank #2
- Comes with secure packaging
- Easy to read text
- It can be a gift option
Apple’s FY2025 Form 10-K, covering the year ended September 27, 2025, provides business and risk context. The issues relevant to the long-term case include product-cycle dependence, competition, services growth and regulation, supply-chain exposure, and continued execution. These are areas to assess in the filing’s risk and management discussion sections, not a claim that the list captures every risk.
What is the long-term case for Microsoft?
Cloud growth offers scale, not a guaranteed return
Microsoft Cloud revenue rose from $137.7 billion in FY2024 to $214.4 billion in FY2026, according to Microsoft’s FY2026 Form 10-K. Separately, the Associated Press reported that Azure and other cloud services revenue grew 43% year over year in the quarter reported in July 2026. These measures show expansion, but they do not by themselves tell an investor how much profit or cash flow the growth will produce after the cost of serving it.
AI investment raises the return-on-capital test
Microsoft’s FY2026 Form 10-K describes significant capital and operational commitments for AI and cloud investments. It says financial success depends on uncertain factors such as customer demand and use, pricing, competition, adoption speed, and the ability to monetize services enough to recover costs. Microsoft’s cloud scale is an opportunity; it is not proof that the associated infrastructure investment will earn attractive incremental returns.
The Associated Press reported CEO Satya Nadella’s statement that Azure revenue surpassed $100 billion for the first time and Microsoft 365 Copilot had more than 30 million paid seats. Those management-reported milestones indicate adoption and scale, but paid seats alone do not establish standalone profitability or the return on the infrastructure supporting AI services.
How should investors compare the two stocks?
Compare the businesses on a common date and with consistent definitions. The operating evidence above is not a substitute for an entry-price analysis: a strong company can still be a poor investment if its share price already assumes more growth or profitability than it delivers.
Do these 3 things before closing this tab:
1Scan for outdated or missing drivers - takes under a minute2Clear out junk files and repair common Windows errors3Fix the driver behind crashes, sound loss and screen glitches- Valuation: Check both companies’ price-to-earnings ratios, free-cash-flow yields, and relevant enterprise-value measures using share prices from the same date. The evidence reviewed here does not establish comparable October 7, 2026 valuation figures, so it cannot identify which stock is cheaper.
- Growth quality: Distinguish Apple’s device and services performance from Microsoft’s cloud growth. Consider how much depends on recurring customer use versus new hardware demand, and compare fiscal periods and company-defined measures carefully.
- Margins and cash generation: Account for Apple’s tariff-refund effects when judging its recent margin and EPS figures. For Microsoft, consider infrastructure and operating costs alongside cloud and AI growth rather than treating revenue growth as equivalent to profit growth.
- Capital requirements: Ask whether each company can sustain its investment needs while producing adequate cash returns. Microsoft explicitly identifies uncertainty around the returns on AI and cloud investment; Apple’s product and ecosystem investment also has to keep the platform relevant.
- Execution and competition: Apple must maintain product appeal and ecosystem engagement; Microsoft must sustain cloud demand and turn AI use into monetization that justifies its costs. Neither company’s historical results guarantee that it will do so.
For the underlying disclosures, consult Apple’s FY2025 Form 10-K and fiscal 2026 Q3 release, Microsoft’s FY2026 Form 10-K, and the Associated Press report on Microsoft’s FY2026 results dated July 29, 2026. The figures and management statements in this article are attributed to those sources; no synchronized share-price comparison is established here.
Best Value
Which stock looks better for the long term?
The answer depends on valuation and on which growth risks an investor considers more acceptable. Apple may suit a view that its consumer ecosystem, devices, and services can continue to support demand. Microsoft may suit a view that enterprise software and cloud expansion can keep growing and that AI demand will ultimately justify substantial infrastructure spending.
Neither operating story settles the stock question. To choose between them, compare current valuation and cash-generation assumptions on the same date, then test whether the expected growth can plausibly support the price. Without that matched valuation evidence, naming a definitive winner would go beyond what the reported results establish.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
