The Better AI Cloud Stock: Microsoft or Amazon?
Written by Daniel Sparks for The Motley Fool -> Microsoft's Azure grew 40% last quarter, outpacing Amazon's cloud unit. Amazon Web Services just posted its fastest growth in 15 quarters. One of the two stocks looks more attractive on both growth and price. The biggest questio
Microsoft's Azure grew 40% last quarter, outpacing Amazon's cloud unit.
Amazon Web Services just posted its fastest growth in 15 quarters.
One of the two stocks looks more attractive on both growth and price.
The biggest question hanging over the AI boom is whether the enormous sums invested in it will yield a return. For the two companies that dominate cloud computing, the payoff shows up in their cloud divisions.
Microsoft (NASDAQ: MSFT) runs Azure, and Amazon (NASDAQ: AMZN) runs Amazon Web Services (AWS) -- the two biggest sellers of rented computing power and the platforms turning artificial intelligence (AI) demand into revenue. Together, they plan to spend close to $400 billion on capital expenditures this year, much of it on AI data centers.
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Both stocks have lagged the market this year, with Microsoft among the megacaps' biggest laggards, down about 19% year to date as of this writing. Is it the better buy? Or should investors bet on the better-performing stock of the two: Amazon?
The case for Microsoft starts with a single number. In its fiscal third quarter of 2026 (the period ended March 31, 2026), Azure and other cloud services revenue grew 40% year over year, edging up from 39% the prior quarter. That keeps Azure ahead of AWS, which has a slower growth rate.
