Apple vs. Microsoft: This Is the Magnificent Seven Stock I’d Buy Today

Apple trades at 37x earnings after a 45% one-year run; Microsoft sits at 27x and is up just 3% year to date, offering a cheaper AI entry point.

Apple's quarterly beat included tariff refunds worth 2 points of gross margin, making the underlying business performance thinner than headline numbers suggest.

Azure crossed $100B in annual revenue growing 43%, and Microsoft's $678B commercial backlog, which is up 84%, signals compounding enterprise AI earnings power into 2028.

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Apple ( NASDAQ: AAPL ) and Microsoft ( NASDAQ: MSFT ) both closed the summer with blowout quarters.

Apple posted its strongest June quarter ever on July 30, powered by a scorching iPhone 17 cycle. Microsoft reported one day earlier, on July 29, 2026, and the story was Azure crossing a landmark. Two mega caps, two very different engines.

iPhone Supercycle Meets a $100 Billion Azure

Apple's Q3 revenue hit $109.42B, up 16.4% year over year, with iPhone alone at $54.3 billion, up 22%. Mac grew a striking 29%, and Services touched $30.74B. Tim Cook called it "the most powerful and most popular iPhone lineup we've ever had."

One caveat worth flagging: roughly 2 percentage points of gross margin and about $0.11 of EPS came from one-time tariff refunds. Strip that out and the beat is thinner than it looks.

Microsoft's quarter was arguably cleaner. Revenue reached $90.01B, up 17.8%, EPS came in at $4.74, and Azure grew 43% year over year, pushing it past $100B in annual revenue for the first time.

Satya Nadella said "Demand continues to exceed available supply." Copilot passed 30 million paid seats, and commercial RPO hit $678B, up 84%. That backlog is a rare thing at this scale.

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