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Introduction
The Apple vs Microsoft financials comparison for 2026 reveals two companies at the peak of their powers—but generating wealth in very different ways. Apple is a revenue giant that sells hardware to consumers. Microsoft is a margin machine that sells software and cloud subscriptions to businesses. That distinction flows through every line of their financial statements.
This post breaks down the key numbers. You will see how their revenues, profits, margins, and capital expenditures compare. Additionally, you will understand why Microsoft spends nearly 13 times more on infrastructure than Apple. Finally, you will know which company offers better value at current prices.
For the big-picture strategic comparison, see our pillar post on Apple vs Microsoft . To understand how these financials translate into stock performance, read our AAPL vs MSFT stock analysis .
Revenue: Apple’s Scale vs. Microsoft’s Growth Rate
Apple and Microsoft both generate enormous revenue, but Apple simply generates more of it. Trailing 12-month revenue for Apple sits at $435.62 billion, comfortably ahead of Microsoft’s approximately $281.72 billion. Apple’s Q1 fiscal 2026 alone delivered a record $143.76 billion, driven by $85.27 billion in iPhone sales and $30.01 billion from Services.
Microsoft’s revenue is smaller but growing slightly faster. Its most recent quarter posted $81.27 billion, up 16.7% year-over-year. The Intelligent Cloud segment contributed $32.91 billion, growing 29%, while Azure revenue accelerated 39%. Microsoft’s commercial backlog has reached a staggering $625 billion, providing exceptional future revenue visibility.
In short, Apple wins on absolute scale. But Microsoft’s revenue is more predictable, more recurring, and currently growing at a slightly faster rate.
Profitability: Microsoft’s Margin Dominance
The most striking difference in Apple vs Microsoft financials is profitability. Apple generated $117.78 billion in trailing 12-month net income—more absolute profit than Microsoft’s approximately $101.83 billion. However, Microsoft converts revenue into profit far more efficiently.
Microsoft’s gross margin of 68.8% towers over Apple’s 46.9%. The net margin gap is similarly wide: approximately 36.1% for Microsoft versus 26.9% for Apple. Why the difference? Microsoft’s revenue mix is dominated by cloud subscriptions and enterprise software, which carry very high incremental margins. Apple’s revenue still depends heavily on hardware manufacturing, which involves material costs, assembly, and shipping.
Think of it this way: for every dollar of revenue, Microsoft keeps about 36 cents as profit. Apple keeps about 27 cents. That margin advantage is the single biggest financial differentiator between the two companies.
Capital Expenditure: The AI Infrastructure Gap
No Apple vs Microsoft financials comparison is complete without examining capex. The divergence here is extraordinary.
In its most recent quarter, Apple spent just $2.37 billion on capital expenditures. Microsoft spent $29.88 billion—nearly 13 times more. Microsoft plans to invest approximately $114 billion in AI and cloud infrastructure, betting that enterprises will pay for AI-powered services at scale. Azure data centers, GPU clusters, and networking equipment consume enormous capital.
Apple’s asset-light model reflects a fundamentally different strategy. Instead of building AI infrastructure, Apple outsources frontier AI capabilities to OpenAI and Google while developing smaller on-device models. This keeps capex low and free cash flow high, protecting the stock from the valuation compression that has punished Microsoft.
For a deeper analysis of these divergent AI approaches, see our Apple vs Microsoft AI strategy comparison . For details on how Apple is challenging Microsoft’s cloud dominance, read our Azure vs Apple Cloud analysis .
Valuation: Microsoft the Bargain?
The Apple vs Microsoft financials story ultimately leads to valuation. Apple trades at 33.3x trailing earnings, a premium to Microsoft’s 26.3x. On a forward basis, the gap narrows but remains significant: Apple at 30.5x versus Microsoft at approximately 22.5x forward earnings—well below Microsoft’s 10-year median of 29.4x.
This compression reflects investor anxiety about Microsoft’s massive AI spending. The market is uncertain whether the $114 billion capex plan will generate adequate returns. Apple, by contrast, has largely avoided that scrutiny, and its premium valuation reflects its reputation as a safer haven.
Analyst price targets mirror this dynamic. Microsoft’s consensus target implies 37.4% upside, while Apple’s implies 14.4%. The market sees more potential in Microsoft at current prices—but only if the AI bet pays off.
Conclusion
Apple vs Microsoft financials tell a tale of two business models. Apple generates more revenue and absolute profit, rewards shareholders with massive buybacks, and spends cautiously on infrastructure. Microsoft generates extraordinary margins, is investing aggressively in AI and cloud, and currently trades at a discounted valuation.
Neither model is wrong. The choice depends on whether you believe Microsoft’s AI spending will deliver returns that justify the capex—or whether Apple’s disciplined, asset-light approach will continue to win by avoiding expensive bets.
