Microsoft vs Amazon, side by side
Ask a business where its computing runs and the answer is usually one of these two: Amazon's AWS pioneered cloud computing and Microsoft's Azure is the fast-growing number two. But the companies around those clouds are very different - Microsoft is nearly all high-margin software, while most of Amazon's revenue is still retail, where margins are famously thin.
On our factor screen it looks strongest on quality and growth, and weakest on value.
On our factor screen it looks strongest on growth and momentum, and weakest on income.
The numbers, side by side
| Measure |  Microsoft |  Amazon |
|---|---|---|
| Price | $464.72 | $271.58 |
| Market cap: The company's total value on the stock market - share price times the number of shares. Big = 'large-cap', small = 'small-cap'. | $3.45T | $2.92T |
| P/E: Price-to-earnings: the share price divided by yearly profit per share. Lower can mean cheaper; higher often means investors expect fast growth. | 25.1 | 21.8 |
| Div yield: Dividend yield: the yearly dividend as a percentage of the share price - roughly the income you'd earn just from dividends. | 0.8% | 0.0% |
| Revenue growth | 17.7% | 19.6% |
| 1Y: How much the share price has moved over the past year. | -9% | +18% |
More measures
| Forward P/E: Price-to-earnings: the share price divided by yearly profit per share. Lower can mean cheaper; higher often means investors expect fast growth. | 20.0 | 26.7 |
|---|---|---|
| Net margin | 40.3% | 17.4% |
| ROE | 34.0% | 30.6% |
| Beta: How bumpy the share price is versus the whole market. Above 1 swings more than the market; below 1 is calmer. It's about the ride, not whether it goes up or down. | 1.13 | — |
The bolder figure is simply the larger of the two - higher is not automatically good (a higher P/E means more expectation in the price; a higher beta means bigger swings).
How they differ
Microsoft is roughly 1.2x the size of Amazon by market value. On our factor screen Microsoft currently screens higher on income and quality, while Amazon screens higher on momentum and growth. Microsoft trades on the higher P/E (25.1 vs 21.8), so more expectation is already built into its price; and Microsoft pays a dividend (0.8%) while Amazon pays little or none. Over the past year the share prices moved -9% (Microsoft) vs +18% (Amazon).
Descriptive only - how the two compare on today's data, never a verdict on either.
Microsoft, in one line
Microsoft is the tech giant behind Windows, Office, and the Azure cloud platform, powering everything from home PCs to massive corporate data centres.
Read the full Microsoft explainer →Amazon, in one line
Amazon is a global giant that started as an online bookstore and now dominates everything from internet shopping to the cloud computing that powers the web.
Read the full Amazon explainer →What to weigh
If dividend income matters to you, the yields differ (0.8% Microsoft vs 0.0% Amazon). These are facts to understand, not a verdict - read each full explainer before deciding anything.
Common questions
Why are their profit margins so different?
Mix. Software and cloud carry high margins, and that is most of what Microsoft does. Amazon's cloud is very profitable too - but it sits inside a much larger retail operation that moves physical goods at thin margins, which pulls the company-wide figure down.
What is AWS and why does it matter so much?
Amazon Web Services rents computing power and storage to other organisations. It is a minority of Amazon's revenue but the majority of its operating profit - which is why cloud growth numbers move the share price so much.