GOOGL Surpasses MSFT in Market Cap for First Time Since 2017: AI Momentum vs. Spending Concerns

Alphabet (GOOGL) has achieved a significant milestone by surpassing Microsoft (MSFT) in market capitalization, marking the first time since 2017 [1]. Internal data shows GOOGL’s market cap at $3.617T compared to MSFT’s $3.509T [0]. This shift is primarily fueled by GOOGL’s strong AI momentum—specifically the launch of Gemini3, which has boosted investor confidence and driven stock performance [0]. In contrast, MSFT has faced challenges from concerns over excessive AI spending, leading to a recent erosion of market value [0].

The market cap reversal reflects a clear investor preference for profitable AI growth: GOOGL’s return on equity (ROE) of 35% outpaces MSFT’s 31.53% [0]. Additionally, GOOGL’s 1-year stock performance (up ~81%) significantly exceeds MSFT’s (up ~13%), indicating stronger confidence in GOOGL’s AI strategy and core business resilience [0].

• GOOGL
  : Ongoing antitrust concerns related to its ad business could impact long-term profitability [0].
• MSFT
  : Overspending on AI without clear near-term ROI poses a risk to investor sentiment [0].

• GOOGL
  : Further adoption of Gemini3 in enterprise markets could drive sustained growth [0].
• MSFT
  : Leveraging its OpenAI partnership to deliver tangible AI products may help regain market confidence [0].

This market cap shift highlights the dynamic competitive landscape in the tech sector. GOOGL’s success is tied to its balanced AI investment and core business strength, while MSFT needs to address AI spending efficiency to regain momentum. No specific investment recommendations are provided.