Compare Microsoft and Apple on three separate questions: how resilient their businesses may be, how much they can reinvest or return to shareholders, and what price investors are paying for those prospects. Their reported results show different business mixes and growth drivers, but historical performance alone cannot establish which share is the better long-term investment. The companies’ fiscal years also end on different dates, so align periods before comparing figures.
Start with comparable periods and distinct questions
Microsoft FY2025 ended June 30, 2025; Apple FY2025 ended September 27, 2025. Those annual results are not from the same reporting window. Microsoft has also reported FY2026 metrics, while Apple FY2026 annual results are not established here. Treat each figure as a dated company report, not as a synchronized snapshot of current performance.
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Keep three judgments separate:
- Business quality: How diversified, durable, and competitive are the activities producing revenue and cash?
- Financial capacity: How much cash can the company generate, and how does it divide capital among investment, dividends, and repurchases?
- Share valuation: What expectations are already reflected in the stock price, and what return might follow if results differ from those expectations?
Company filings help answer the first two questions. They do not, by themselves, answer the third or predict future share returns.
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Microsoft: several connected business lines
Microsoft’s FY2025 annual report describes revenue from cloud services, productivity and business software, gaming, devices, advertising, software licensing, and support. Microsoft reported FY2025 revenue of $281.7 billion, up 15%, and operating income of $128.5 billion, up 17%. Microsoft Cloud revenue was $168.9 billion, up 23%; Azure revenue exceeded $75 billion for the first time. These company-reported figures are for the year ended June 30, 2025. Microsoft FY2025 Annual Report
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The range of businesses gives Microsoft multiple sources of revenue, but it does not remove concentration or execution risk: cloud and AI infrastructure are prominent growth areas and require substantial investment.
Apple: hardware-led sales with a large services business
Apple’s FY2025 Form 10-K reports $416.161 billion in net sales for the year ended September 27, 2025, up 6%. iPhone remained the largest reported category, while Services was substantial and grew faster than total sales.
| Apple FY2025 category | Net sales | Reported change |
|---|---|---|
| iPhone | $209.586 billion | Not stated here |
| Services | $109.158 billion | Up 14% year over year |
| Mac | $33.708 billion | Not stated here |
| iPad | $28.023 billion | Not stated here |
| Wearables, Home and Accessories | $35.686 billion | Down 4% year over year |
Apple’s FY2025 category figures are company-reported sales, not a forecast of future mix. Greater China net sales decreased, primarily because of lower iPhone sales, while other regions recorded increases across different product and services combinations. Apple FY2025 Form 10-K
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For either company, concentration is an exposure to examine rather than an automatic verdict on quality. Ask what could happen to the business if its largest revenue source slows, customers delay upgrades, or a new competing product changes demand.
Assess growth without extrapolating it indefinitely
Microsoft’s reported cloud figures indicate continued growth across different periods, but the periods and measures should not be conflated. Microsoft Cloud revenue rose 23% to $168.9 billion in FY2025. For FY2026, Microsoft reported Microsoft Cloud revenue of $214.4 billion and Azure and other cloud services growth of 40%. In the FY2026 fourth quarter specifically, Azure and other cloud services revenue grew 43% year over year. These are Microsoft-defined measures; the annual growth figure and the quarter’s year-over-year rate describe different periods. Microsoft FY2026 Investor Metrics Microsoft FY2026 Q4 Earnings Release
Apple’s FY2025 total net sales rose 6%, while Services grew 14%; iPhone remained the largest category. That combination suggests different growth rates within Apple’s business, not that the faster-growing segment will keep growing at the same rate or displace hardware as the central exposure.
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A useful long-horizon comparison tracks several years of revenue, operating income, and segment trends using matched fiscal periods and consistent definitions. A single strong year or quarter can reflect timing and does not establish a durable rate of growth.
Look at margins, cash generation, and the cost of reinvestment
Operating income is one useful measure of profitability, but compare it across companies and periods using the same definition. Also examine operating cash flow and how much of it remains after capital investment. The figures above establish Microsoft’s FY2025 revenue and operating income, but they do not provide a synchronized comparison of both companies’ operating cash flow or margins; those should be taken from each company’s filings for aligned periods rather than inferred from revenue or cash balances.
Investment needs affect how much cash can ultimately support shareholder returns. Microsoft says data-center expansion and AI infrastructure investment can increase costs and pressure operating margins. Apple’s filing discusses product and services economics as well as component, manufacturing, and supplier commitments. For example, at September 27, 2025, Apple reported $56.2 billion in manufacturing purchase obligations, of which $55.4 billion were payable within 12 months. These obligations are a dated commitment disclosure, not a direct forecast of profit or cash flow. Apple FY2025 Form 10-K
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Evaluate capital allocation, not just cash or buybacks
Microsoft reported returning $37.7 billion to shareholders in FY2025 through dividends and share repurchases, while continuing to invest in cloud and AI infrastructure. Apple reported $132.4 billion in cash, cash equivalents, and marketable securities as of September 27, 2025, and described its capital return program. Apple also said cash and ongoing operations, together with access to debt markets, were expected to meet requirements over the next 12 months and beyond. The Microsoft return figure and Apple cash figure measure different things, at different dates, and are not a direct comparison of shareholder value. Microsoft FY2025 Annual Report Microsoft FY2026 Shareholder Meeting Materials Apple FY2025 Form 10-K
When assessing either company’s capital allocation, track dividends, repurchases, investment, and changes in shares outstanding. A buyback can support per-share results, but its benefit depends on the price paid and on share issuance that offsets repurchases. A large cash balance is not proof that a stock is undervalued.
Compare risks and the ability to adapt
Management disclosures identify risks to monitor; they do not assign objective probabilities or show that a particular risk will occur. Microsoft identifies intense competition, changing customer preferences, macroeconomic and geopolitical conditions, infrastructure constraints, and the availability of energy and land. Its spending on data centers and AI capacity also creates execution and cost questions.
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Apple identifies competition, product transitions, market acceptance, regulatory requirements, and market access among its risks. A product transition matters because the business depends on customers adopting new products and continuing to use the related ecosystem. Its regional sales differences also show why a company-wide growth rate can mask divergent market performance.
For each risk, consider both the possible business impact and the company’s options to respond: pricing, product changes, capacity investment, geographic reach, or shifts in capital allocation. Avoid treating management’s risk disclosures as independent forecasts.
Make valuation the final comparison
To decide whether either stock suits a long horizon, use share prices from the same date and a clearly stated valuation method. Depending on the method, an investor might compare price-to-earnings or enterprise-value measures, but the inputs must use consistent reporting periods and definitions. Then test what growth, margins, reinvestment, and cash returns the current price appears to require.
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The financial disclosures summarized here do not establish current valuation multiples or synchronized share prices. They also do not provide enough information to calculate expected returns. A claim that Microsoft or Apple is cheaper or the better buy cannot be derived from historical growth, cash, or business quality alone; it requires dated market prices and explicit assumptions about future results.
A practical comparison checklist
- Align the reporting windows. Record each fiscal year-end and use the same number of years wherever possible.
- Map revenue exposure. Identify the largest business or product categories, their growth trends, and geographic differences.
- Check profitability and cash. Compare operating margins and cash flow using the same definitions, then account for investment requirements.
- Track capital allocation. Separate dividends, buybacks, share-count changes, and spending needed to sustain growth.
- List company-specific risks. Assess competition, customer demand, regulation, supply or infrastructure constraints, and execution.
- Test valuation assumptions. Use synchronized prices and ask what must go right for the price to deliver an acceptable return.
Finally, fit the result to the investor’s own horizon, risk tolerance, and portfolio concentration. There is no single objective winner without those choices and a valuation view.
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