Google stock (NASDAQ: GOOG) has surged nearly 30% in six months while Microsoft (NASDAQ: MSFT) has declined 26% in the same timeframe. This is not the only development that has kept Alphabet in the top place compared to its competitor software giant. The search engine has many noteworthy developments that make it a better investment than its peers.
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Google Stock vs Microsoft: GOOG Offers a Better Deal
The Custom AI Chip Advantage
Alphabet’s main advantage is that the company has been building its own Tensor Processing Units (TPU) chips since 2015. They are currently on their 7th Generation (Ironwood/TPU version 7), and their hardware and software are perfectly integrated into the AI system. While Microsoft also announced that it would build its own ‘Maia 200 chips’ from 2023, it is still ramping up across data centers. In addition, the majority of Azure’s AI workload still relies on buying Nvidia H100/H200 chips. Google has a clear advantage here that can power up its stock prospects against Microsoft. While Microsoft’s effort to build a noteworthy AI is noticeable, Google is much ahead of the curve already.
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The Hidden Bet That Will Soon Pay Off
While Microsoft has invested in other businesses, Google’s SpaceX investment could be ready for a payoff this year. For the uninitiated, Alphabet had invested $1 billion in Elon Musk’s SpaceX in 2015 along with Fidelity Investments. Now, SpaceX is aiming for an IPO valuation of $2 trillion, which can unlock $140 billion worth of shares for Alphabet. It would allow Google to liquidate the stocks when required, and that’s not the case for Microsoft.
For instance, Alphabet’s capital expenditure to build its AI platforms stands at $175 billion to $185 billion. If they liquidate the SpaceX stocks worth $140 billion after launch, they get cash flow to build further and not remain tight for funds. It would also be more than the net income that Alphabet generated in 2025, which is $132.17 billion. In conclusion, Google is much ahead in the AI game against Microsoft, which can benefit GOOG stock immensely.