Microsoft vs. Broadcom: Two AI Powerhouses, One Better Investment

Microsoft (NASDAQ: MSFT) and Broadcom (NASDAQ: AVGO) beryllium connected other sides of the aforesaid AI trade.

Microsoft conscionable closed Q4 FY2026 with $90.01 cardinal successful revenue, portion Broadcom posted Q2 FY2026 gross of $22.187 billion. One rents the AI factory. The different sells the picks. Comparing them close present tells you wherever endeavor spending is really landing.

Copilot Seats Carry Microsoft. Custom Silicon Carries Broadcom.

Microsoft's 4th was a bundle communicative wearing an infrastructure suit. Intelligent Cloud jumped 32% to $39.31 billion, Azure grew 43% twelvemonth implicit year, and full-year Azure gross crossed $100 cardinal for the archetypal time. Microsoft 365 Copilot deed implicit 30 cardinal paid seats, and commercialized RPO of $678 billion, up 84%, is the fig I support circling. That is contracted work, not hope.

CEO Satya Nadella framed it plainly: "We are advancing the frontier connected the cost-to-outcome curve, ensuring each lawsuit tin crook tokens into concern results." Reported non-GAAP EPS came successful astatine $4.74, topping the $4.2397 statement estimate.

Broadcom's 4th was axenic silicon leverage. AI semiconductor gross reached $10.80 billion, up 143% twelvemonth implicit year, and Hock Tan guided Q3 AI semis to $16 billion, maturation implicit 200%. Operating income much than doubled to $10.788 billion, up 85.07%. EPS of $2.44 topped the $2.3972 estimate, extending an eight-quarter bushed streak.

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Platform Owner vs. Arms Dealer

The strategical divided is architectural. Microsoft is spending similar a utility: full-year CapEx of $115.95 cardinal pushed escaped currency travel down to $19.639 billion, a 23.19% decline. That is the terms of owning the AI stack from information halfway to Copilot license.

Broadcom took the other route. Fabless, asset-light, and shipping to a abbreviated database of hyperscalers, it turned $22.187 cardinal successful gross into $10.262 cardinal successful escaped currency flow.