Azure vs. AWS vs. Google Cloud: Who's Winning the Cloud & AI War in 2025?

Artificial intelligence ("AI") rules all right now. And as the AI boom continues, a clash of the tech titans is unfolding before our eyes.

With the insane amount of computing power needed for AI, "cloud wars" are forming the foundation for AI growth. And the three cloud services duking it out are familiar names... Amazon Web Services ("AWS"), Alphabet's (GOOGL) Google Cloud, and Microsoft (MSFT) Azure.

Who's winning?

AWS is the frontrunner in revenue, at $30.9 billion during Q2 2025. Google Cloud earned an impressive $13.6 billion during the same quarter.

And Microsoft's Intelligent Cloud group – with Azure as its primary service – grew dramatically in Q2 2025 (Microsoft's fiscal Q4 2025), generating $29.9 billion in revenue.

Given that strong performance, can Azure become the true engine of Microsoft's success? Or will the competition from AWS and Google Cloud limit its upside?

Let's dig in...

The State of Cloud Market Share in 2025

Amazon (AMZN) is leading the way in cloud market share as we approach 2026. Here are the numbers based on Synergy Research Group data for Q2 2025:

• AWS: 30%

• Azure: 20%

• Google Cloud: 13%

When it comes to sales, AWS' revenue climbed 18% year-over-year ("YoY") during Q2 2025, beating analyst expectations. But Amazon's competitors may be catching up.

Azure's revenue growth came in at an estimated 39% YoY. And Google Cloud's revenue grew 32% YoY.

(Azure's 39% growth is an analyst estimate. Microsoft does not report Azure's exact revenue. Rather, Microsoft reports the performance of its entire Intelligent Cloud segment, which includes Azure and other services. That segment grew 26% YoY, which still outpaces AWS' 18% growth.)

Let's look at why Azure and Google Cloud are gaining ground on AWS... and which one is further ahead.

Azure: Offers seamless integration, hybrid cloud solutions, and a heavy focus on AI

Microsoft's advantage is that Azure is built to work seamlessly with other Microsoft products. The cloud platform fits within an ecosystem of products like 365, Teams, and Power BI (a business intelligence product).

How significant is that advantage? Consider that...

• More than 2 million companies worldwide use the Microsoft 365 productivity suite (Word, Excel, and PowerPoint).

• The Microsoft Windows operating system powers more than 1 billion devices

• 85% of Fortune 500 businesses already use Azure for their cloud services.

With so many organizations investing in Microsoft products, using Azure as their cloud platform is a no-brainer.

Azure also has hybrid cloud options that give businesses more flexibility and control. First, Azure Arc is a service that adds Azure's management capabilities to any infrastructure... including multi-cloud, on-premises, and edge computing environments.

Another example, Azure AI Foundry – formerly known as Azure AI Studio – is a platform for developers to build and enable AI solutions. Microsoft calls Azure AI Foundry its "application and agent factory." This platform-as-a-service allows users to design and manage AI apps and agents at scale.

And Copilot works with Microsoft 365 apps to help users save time on tasks, like drafting content, analyzing data, and summarizing reports.

Azure AI Foundry has quickly become a favorite of developers...

In May, Microsoft estimated that 70,000 companies were using AI Foundry. And in just four months, more than 10,000 organizations had adopted the platform's new Agent Service to create, deploy, and scale AI agents.

All told, Microsoft's investment in AI and machine learning ("ML") is turning into a significant growth driver. Consider the company's well-publicized deal with OpenAI (in exchange for a $13 billion investment in OpenAI, Microsoft receives access to OpenAI's technology to power Azure and Copilot).

That's because Azure OpenAI, Copilot, and agentic AI are proving hugely useful for businesses...

Thanks to Microsoft's AI ecosystem, they can streamline complex workflows, automate customer service, pull insights from large datasets, and develop custom AI applications... all in a secure and scalable cloud environment. And it's all seamlessly built into their existing Microsoft services.

Microsoft's AI tools have potential to change the way businesses operate – and that shift has already begun.

Google Cloud: Smallest market share, but making an impact in generative AI

Google Cloud is a very developer-friendly platform. Because it promotes open-source technologies (Kubernetes, TensorFlow, etc.), it's the platform of choice for many innovators and startups that want flexibility and cross-compatibility.

So far, Google Cloud still trails behind AWS and Azure in market share. But it's demonstrating growth that's impossible to ignore, especially in generative AI and analytics.

It has a number of tools on its side, such as...

• Google's Vertex AI can build, train, deploy, and scale generative AI models, which any enterprise involved in large-scale data processing can benefit from.

• By integrating its generative AI models (such as Gemini) into Vertex AI and other services, Google makes it easy for enterprises to build AI applications, including:

• • Customer-service chatbots and virtual assistants

• • Personalized customer experiences

• • Programs that create text, images, and other content

• Google Cloud's powerful analytics tools (like BigQuery) are built into its AI services. That means businesses can use machine learning on large datasets using standard SQL queries.

Google is also allowing more businesses to use its custom-built AI chips known as Tensor Processing Units ("TPUs"). Up until recently, Google has largely only used TPUs in-house. These chips deliver a performance advantage for especially AI-intensive workloads and large-scale AI training.

Google Cloud's AI offerings are undoubtedly strong, but they still have some ground to make up if they expect to catch AWS or Azure in terms of market share.

Why Azure Is Microsoft's Growth Engine... With More to Come

Azure is clearly a key driver in Microsoft's success – if not the key driver.

As we noted, the company's Intelligent Cloud group saw 26% YoY revenue growth, with Azure growing by 39% in Microsoft's Q4 2025.

That propelled Microsoft's revenue to soar 18% YoY, with Azure and other cloud-service sales exceeding $75 billion during the fiscal year for the first time ever.

So why do some analysts believe that Azure is underappreciated in Microsoft's stock price?

As financial-services firm Wedbush Securities noted back in June, "We strongly view this as Microsoft's 'shining moment' with AI set to change the cloud growth trajectory."

And Wedbush is not alone. Many believe that Azure's potential has not been fully priced into the stock.

The first reason is that much of Azure's growth is lined up for the future. Increasingly, enterprise customers are moving to the cloud and committing to long-term contracts. Microsoft's commercial bookings have exploded, soaring 67% year-over-year to roughly $300 billion in locked-in contracts.

So, while Azure is set up for a powerful long-term revenue stream, it may not be fully reflected in the share price just yet.

Second, Microsoft is a $3 trillion-plus titan with many business segments that all feed into its bottom line. While we've noticed Azure's impressive growth, all of Microsoft's other segments may obscure the overall outlook and make Azure's rise less apparent.

Finally, fears of an "AI bust" spike at certain times. We saw it earlier in 2025, when investors pulled away from high-risk AI and tech stocks...

The first shock was when Chinese AI startup DeepSeek released its free, open-source large-language AI model in February. DeepSeek claimed the model was developed for less than $6 million. Investors panicked, fearing that more expensive U.S. AI products couldn't compete.

A couple months later, President Donald Trump's impending tariffs threatened to end the tech-stock bull market. As volatility spiked in April, some analysts even feared an "AI bubble" like the dot-com boom and bust... And the bubble debate continues today.

The chaos has passed for now – but as we've seen, the market for tech stocks can be volatile. Investors load up on these stocks when times are good... then sell at the first sign of trouble.

Importantly, though, that hasn't stopped the bull run. And while there are still periodic signs of bubble fear – and even AI fatigue – huge investments are still going toward the long-term success of artificial intelligence.

If Azure continues to deliver similar growth as it did throughout FY 2025, investors will soon stop underestimating just how important it is to Microsoft.

AWS and Google Cloud: The Competitive Threats

Microsoft's Azure has earned its 20% market share... and it wants more. Standing in its way, however, are AWS – the current market leader – and Google Cloud

Let's look at the risks each cloud giant presents to Azure during this race to the top.

AWS Leans on Ecosystem and AI to Stay Ahead

Right now, AWS is holding onto its lead at 30% market share.

What AWS has in its favor is loyalty. AWS was an innovator – a pioneer, even – in cloud infrastructure, so its customer base is large and longstanding. Users love the vast ecosystem of the AWS marketplace, which contains more than 42,000 products and services.

Azure and Google Cloud are making their gains through cost advantages, integration with existing enterprise software, and strong hybrid cloud technologies.

Amazon has no intention of letting either company catch up easily, though. It's taking measures to fight off the competition... especially Azure.

To do so, Amazon has challenged Microsoft's software licensing advantages, with Amazon claiming that Microsoft artificially raises prices and pushes customers toward Azure cloud.

Specifically, Microsoft makes it more expensive to run Windows on cloud services outside of Azure. Amazon has claimed that costs can be up to four times higher.

AWS is also aggressively pushing its own AI offerings to offset Azure's...

Amazon Bedrock, for example, provides access to a range of AI foundation models. Customers can use these to build generative AI applications without managing the infrastructure. This is essentially AWS' version of Azure OpenAI and Google Cloud's Vertex AI.

It also has Amazon SageMaker, a machine learning platform. Like Azure ML, it puts custom AI solutions into developers' hands.

And to seize some momentum from Azure's leading hybrid cloud capabilities, AWS is improving on its own hybrid solutions. One example is AWS Outposts, which brings AWS infrastructure and services to on-premises data centers – so customers can run cloud applications on-site.

Pricewise, Azure is generally considered to be more cost-effective for smaller businesses, workloads, and Microsoft-based enterprises. But AWS is aggressively countering that by offering large-scale users lower prices through commitment-based pricing models. It also offers AWS Enterprise Agreement discounts for its largest customers.

Google Cloud Leans on AI, Open Source, and Infrastructure Strengths

Google Cloud doesn't have the market share leadership advantage like AWS. But its YoY revenue growth beat AWS and Microsoft's Intelligent Cloud group as a whole (though it trailed Azure's growth rate).

Google Cloud has a strong background in AI, with a major focus on data. So its platform can offer advanced data processing and ML services... including Gemini, Vertex AI, and BigQuery.

Open-source technology is always a favorite of developers. We've already covered how Google Cloud's commitment to open-source technologies brings in innovative companies looking to diversify their cloud usage.

Google's focus on open source serves as a contrast to Microsoft's marketing of Azure, which leans heavily on its Microsoft integration.

Meanwhile, Google can also sell customers on something that neither AWS nor Azure can claim. Google Cloud's platform uses the same world-class infrastructure as Google Search, Gmail, and YouTube. And it's built on Google's own private fiber-optic network.

Each AI cloud platform excels at what it does. So the efforts of AWS and Google Cloud to slow Azure's momentum are worth watching in the coming months.

The AI Cloud Race: Who's Winning?

It's difficult to determine a blanket "winner" to the AI cloud race. We could look at overall recent growth and declare Azure the champion... but you could also point to total revenue and market share and hand the crown to AWS.

Even the technology itself has different strengths to offer. A given platform might be the best at one, but lacking in others.

When you focus on generative AI – especially as cloud providers are increasingly looking to capture generative AI workloads – Azure has been immensely successful. But again, there are several ways to view the Azure vs. AWS vs. Google Cloud race.

For investors, AI adoption is already disrupting the cloud market...

And given the overall AI boom, investors should focus on not only the big three cloud companies, but also on smaller, "AI-native" companies.

AI-native companies don't use AI as an add-on – they've incorporated it into essential operations from the ground up. This category includes AI cloud compute businesses like CoreWeave (CRWV), Lambda (private, but gearing up for a 2026 IPO), and Crusoe... as well as foundational AI companies such as Anthropic, Cohere, Mistral AI, and Elon Musk's xAI.

Why? Because the cloud-computing leaders like Microsoft, Amazon, and Google are dealing with massive capex. They're spending big in the hopes that it will pay off. That could open the door for competition from smaller, leaner businesses – even if they have the potential to be more volatile.

Fortunately, investors don't have to choose. The best approach may be to invest in the dominant hyperscalers that have many ways to win... while also adding some exposure to these smaller players.

What the AI Cloud-Services Boom Means for Investors

The AI boom still dominates the headlines and the markets. Look no further than the recent splashes made by Nvidia (NVDA), Intel (INTC), and Oracle (ORCL).

Now that the boom is making its way into the cloud, the time is right for investors to pounce on the hyperscalers... Microsoft, Amazon, and Alphabet.

Let's take one last look at each stock and see how they stack up for us in the AI cloud-services sector:

Microsoft (MSFT): Azure Growth and AI Partnerships Fuel an A-Rated Outlook

Microsoft has a lot going for it. As we've covered, Azure is driving Microsoft's growth with consistently increasing revenue. Thanks to its seamless Microsoft 365 integration, its partnership with OpenAI, and its Azure AI Foundry ecosystem, Azure should continue to be a reliable moneymaker for Microsoft for the foreseeable future.

A look at our proprietary Stansberry Score confirms the positive vibes surrounding Microsoft, with an overall A grade...

Potential downsides of investing in Microsoft? Valuation (we give it a C grade).

But all three of these companies trade for high valuations. These are tech giants at the top of the market. Every investor wants to own these World Dominators. Inevitably, their shares don't come cheap.

On that note, Microsoft's rivals aren't going anywhere... which presents another risk for investors. The intense competition can change the AI and cloud compute outlook in a hurry.

That's not necessarily a bad thing for Microsoft, though. Competition breeds innovation. Maintaining its momentum and capturing more market share are high priorities for the company. If it succeeds, revenue will soar even higher.

Microsoft is a strong buy and a potential long-term winner.

Amazon (AMZN): Still the AI Cloud Leader, But Facing Margin Pressure

Just a few seconds ago, you read this sentence: "The intense competition can change the AI and cloud compute outlook in a hurry."

Well, that's exactly what has happened to Amazon.

Relentless competition, especially from Microsoft and Alphabet, stalled Amazon's AWS growth... so much so that both Azure and Google Cloud surpassed AWS' growth rate, with Azure gaining plenty of ground in market share as well.

That's the bad news.

The good news? AWS is still number one in AI cloud-computing market share, and its revenue is still growing double digits. Its competition is just growing faster.

But Amazon's capital expenditures (like Microsoft's) are extremely high thanks to massive investments in AI infrastructure, data centers, and other projects. That eats into the company's free cash flow. And that's a big concern for some investors... especially since Microsoft has very few cash flow issues.

These factors have impacted AMZN as an investment. As you can see from our Stansberry Score, Amazon grades out... OK. It earns a B overall.

All that said, let's look at Amazon from 30,000 feet for a moment.

Amazon made its fortune in e-commerce... and now, it's the market share leader in AI cloud services. These are two vastly different businesses, yet Amazon is a leader in both. That should give investors confidence, despite AMZN stock and AWS facing near-term volatility.

Amazon has created a multibillion-dollar, triple-digit-growth AI business within AWS, driven by offerings like Amazon Bedrock. Plus, it benefits from major partnerships – like its deal with AI company Anthropic, creator of the Claude chatbot.

Anthropic uses AWS as its primary cloud provider... and Amazon has invested billions of dollars in the startup. The revenue generated by this team-up alone could be worth billions more in a couple of years.

At the end of the day, Amazon is Amazon. And it's tough to bet against Amazon. Consider us bullish for the long term, cautious in the short term – the stock is a good opportunity, but not as strong as Microsoft.

Alphabet (GOOGL) Cloud Surge: Google's Underdog Story Won't Last Long

It's a crazy world when we find ourselves considering Alphabet an underdog in, well, anything. But here it is, in third place for cloud compute market share behind AWS and Azure.

Alphabet likely won't be an underdog for long, though... especially when you consider Google Cloud's astronomical recent growth.

To review, Google Cloud revenue grew by 32% in Q2 2025, to $13.6 billion. Its operating income more than doubled to $2.8 billion, delivering Alphabet a generous margin. As Alphabet's fastest-growing segment, Google Cloud shows no signs of slowing down or giving in to its bigger-revenue competitors.

Like its peers, Alphabet is facing high capex... the price for admission to the AI cloud race. The company's big spending on AI infrastructure could drag on its free cash flow and short-term margins.

But it's a small price to pay. Analysts and investors are incredibly bullish about the company's long-term growth and success as it continues expanding through its Gemini AI model.

We're bullish on Alphabet as well, as reflected in our Stansberry Score... a strong B grade with Momentum Bonus.

Forget about its third-place market share ranking... Alphabet's proven track record and exceptional growth in the AI and cloud compute space make it a solid buy.

Bottom line? Microsoft may be our winner for now. But you're looking at three of the most profitable businesses in the world, each with a long track record of success.

Keep your eyes on their newest and upcoming AI and cloud innovations to gauge who might jump ahead in the cloud race... and invest accordingly.

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Regards,

David Engle