Why Alphabet & Microsoft Could Leave Apple in the Dust by 2026

Apple’s $4 trillion valuation looks impressive on paper, but dig into the numbers and you’ll find something interesting: the stock might be pricing in perfection while actually delivering mediocrity compared to its tech peers.

The AI Moat Growing Wider

Alphabet just dropped Gemini 3, and it’s not just another chatbot—it’s outperforming ChatGPT across benchmarks in language processing, image generation, and research capabilities. Here’s what matters: Gemini is already baked into Google Search (2 billion monthly users), the standalone Gemini app hit 650 million MAUs, and 70% of Google Cloud’s customers are already using it.

On the revenue side, Google Cloud is growing 34% YoY, but Gemini’s actual revenue growth is likely running even hotter. Alphabet’s overall top line is up 15% (constant currency) with solid margins—and that’s just the beginning. Throw in 13 million developers building on Gemini, and you’ve got an AI flywheel that’s far from peaking.

Microsoft’s Quiet Infrastructure Win

While everyone debates OpenAI vs. Gemini, Microsoft has been signing monster deals on the back end. Just this week, Anthropic committed to $30 billion in Azure credits. OpenAI and Anthropic deals combined represent eye-watering lifetime revenue.

Azure grew 39% YoY last quarter. Microsoft’s entire cloud business (including non-AI components) hit $123.6 billion annualized run-rate. Meanwhile, their Office/LinkedIn segment cranked out 14% YoY growth to $33 billion last quarter. Operating margin? 49%. That’s the kind of leverage that compounds.

The Valuation Gap That Matters

Here’s the brutal comparison:

3-Year Revenue Growth:

• Microsoft: +44%
• Alphabet: +37%
• Apple: +7.4%

Current P/E Ratios:

• Apple: 36x
• Microsoft: 34.5x
• Alphabet: 29x

So Apple is paying the highest multiple for the slowest growth. And it’s not like Apple’s cooking up the next iPhone—reports suggest Siri might just become a white-label Gemini wrapper, which would mean paying Alphabet $1 billion annually for the privilege.

The Case for 2026

If growth trajectories hold and valuations compress toward fundamentals, Microsoft and Alphabet should both eclipse Apple’s market cap by year-end 2026. One’s crushing it in consumer AI + cloud, the other’s dominating cloud infrastructure for AI startups. Apple? Still selling phones with yesterday’s AI assistants.