According to Groww, mega-cap tech stocks have dominated the S&P 500 for years, with Facebook, Amazon, Apple, Netflix and Google accounting for roughly 15% of the S&P 500 and 30% of the tech-heavy Nasdaq. It is said that there is blog.
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But in recent years, the company name change and Microsoft's growth has created a new collection of tech stocks: MAMAA. This acronym stands for Microsoft, Apple, Meta (formerly Facebook), Amazon, and Alphabet (formerly Google). These five stocks have a combined market capitalization of $10 trillion, make up 22% of the S&P 500, and have significantly outperformed the index over the past decade.
If you currently have some extra cash, perhaps from a tax refund, you may be considering investing in one of these stocks. MAMAA stock is definitely your choice for long-term gains. But is Microsoft or Google a better buy for investors right now?
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Example of investing in Microsoft stock
Microsoft (MS) recently overtook Apple as the world's most valuable company by market capitalization due to its acquisition of Activision Blizzard in Q4 2023. The latest report showed a 33% year-over-year increase in profits.
Microsoft's cloud computing division, led by Azure, grew 20% year over year. However, looking at AI and looking at MS, Bing Chat's performance was not as expected, with the company's search and news ad revenue increasing by only 8%.
AI Copilot, which is integrated into the Office 365 suite and other MS products, puts MS in the driver's seat when it comes to AI advancements compared to Google.
Overall, Microsoft stock is up 47% over the past 12 months.
Case study of investing in Google stock
Google (Alphabet) stock has risen more than 40% over the past year, putting it on par with Microsoft. According to TipRanks.com, the company's ad revenue rose just 11% last year, $65.5 billion less than expected. The company rebranded Bard Chatbot to Google Gemini in early 2024, but Microsoft-invested OpenAI's ChatGPT continues to dominate that market.
Additionally, Google Cloud continues to grow, with revenue up 26% year-over-year.
last note
Looking at the numbers, investing in either tech giant would be a smart move. TipRanks.com gives both Alphabet and Microsoft a Strong Buy rating. Microsoft's upside potential is 11%, while Alphabet's upside potential is 8.4%.
Experts say TipRanks.com recommends both stocks as long-term investments, but if you're looking for short-term gains, Microsoft wins due to its broad-based revenue growth.
Details of GOBankingRates
This article originally appeared on GOBankingRates.com: Microsoft vs. Google: Which tech stock is a better buy for investors?
