Core Viewpoint - Alphabet's stock has surged recently, positioning it nearly at a $4 trillion market cap, while Microsoft remains close with a market cap of $3.657 trillion, leading to investor interest in which stock is the better buy [1][8]. Company Overview - Alphabet, the parent company of Google, derives most of its revenue from advertising, which totaled $74.2 billion in Q3 2025, contributing to a total revenue of $102.3 billion [2][4]. - Microsoft has a diverse business model, with significant revenue from business productivity tools and cloud computing, generating $33 billion and $30.9 billion respectively in Q1 FY 2026, totaling $77.7 billion [5][8]. Revenue Growth and Stability - Alphabet's advertising revenue is currently growing, but is vulnerable to economic downturns as companies may cut back on advertising spending [4]. - Microsoft’s business and cloud computing segments are more resilient during economic downturns, showing steadier growth compared to Alphabet [5][7]. Cloud Computing Segment - Both companies are experiencing increased demand in their cloud computing operations, driven by artificial intelligence workloads, with Microsoft Azure's revenue rising 40% year over year in Q1 FY 2026 [7]. - Google Cloud's revenue grew 34% year over year in Q3 2025, and Alphabet is exploring new revenue streams by potentially selling its tensor processing units (TPUs) [8][9]. Investment Perspective - Alphabet's stock is currently trading at 31 times forward earnings, slightly more expensive than Microsoft, but potential revenue from TPUs could make it appear cheaper than it is, suggesting it may be the better buy [9][11].

Financial Performance - Meta Platforms, Inc. reported a revenue of $47.516 billion for Q2 2025, a 22% increase from $39.071 billion in Q2 2024 [1] - Costs and expenses rose to $27.075 billion, up 12% from $24.224 billion year-over-year [1] - Net income for the quarter was $18.337 billion, reflecting a 36% increase compared to $13.465 billion in the same quarter last year [1] - Diluted earnings per share (EPS) increased by 38% to $7.14 from $5.16 year-over-year [1] Operational Highlights - Family daily active people (DAP) averaged 3.48 billion in June 2025, a 6% year-over-year increase [10] - Ad impressions across the Family of Apps increased by 11% year-over-year, while the average price per ad rose by 9% [10] - Total capital expenditures for Q2 2025 were $17.01 billion, with share repurchases amounting to $9.76 billion [10] Future Guidance - The company expects Q3 2025 total revenue to be between $47.5 billion and $50.5 billion, with a 1% foreign currency tailwind anticipated [4] - Full-year 2025 total expenses are projected to be in the range of $114 billion to $118 billion, reflecting a growth rate of 20-24% year-over-year [5] - Capital expenditures for 2025 are expected to be between $66 billion and $72 billion, indicating a significant increase from the previous year [7] Segment Performance - Revenue from the Family of Apps segment was $47.146 billion, up from $38.718 billion year-over-year, while Reality Labs generated $370 million [29] - Income from operations for the Family of Apps was $24.971 billion, compared to $19.335 billion in the prior year, while Reality Labs reported a loss of $4.530 billion [29] Cash Flow and Financial Position - Cash flow from operating activities was $25.561 billion for Q2 2025, compared to $19.370 billion in Q2 2024 [30] - Free cash flow for the quarter was $8.549 billion, down from $10.898 billion year-over-year [30] - As of June 30, 2025, cash, cash equivalents, and marketable securities totaled $47.07 billion [10]