Executive summary
- Microsoft: latest quarter revenue $76.4B, revenue +18% YoY, diluted EPS $3.65; debt-to-equity ~0.12 – core Azure exposure, highest market cap among peers.
- Alphabet (Google Cloud): latest quarter revenue $96.4B, revenue +14% YoY, diluted EPS $2.31; long-term debt small relative to equity (D/E ≈0.065).
- Amazon (AWS exposure): latest quarter revenue $167.7B, revenue +13% YoY, diluted EPS $1.68; long-term debt $50.7B vs equity $333.8B (D/E ≈0.15).
- Snowflake, ServiceNow, Atlassian: selected cloud software plays with low or moderate debt; Snowflake shows near-zero long-term debt and high gross margins but still a growth-for-profit trade-off.
Verdict (one sentence): For conservative cloud exposure, the best current choices among the large-cap cloud names are the low debt cloud computing stocks 2025 identified above – they combine durable revenue growth with balance-sheet optionality while offering differentiated AI/cloud moats.
Summary fundamentals
All figures are the latest reported quarter or the most recent company disclosure cited.
- Microsoft Corporation – Latest quarter revenue $76.4B; YoY revenue +18%; Latest quarter diluted EPS $3.65; YoY EPS +24%; Gross margin (trailing fiscal) ~69%; Debt-to-equity ≈0.12; Market cap ≈ $3.85T.
- Alphabet Inc. – Latest quarter revenue $96.4B; YoY revenue +14%; Latest quarter diluted EPS $2.31; YoY EPS +22%; Gross margin (quarter) ~59.5%; Debt-to-equity ≈0.065; Market cap ≈ $2.97T.
- Amazon.com, Inc. – Latest quarter revenue $167.7B; YoY revenue +13%; Latest quarter diluted EPS $1.68; YoY EPS +33%; Gross margin not central to AWS mix; Debt-to-equity ≈0.15; Market cap ≈ $2.35T.
- Snowflake Inc. – Latest quarter revenue (Snowflake fiscal quarter) and YoY growth per company release; Snowflake shows near-zero long-term debt and equity base ≈$2.37B (so D/E effectively near 0); Market cap ≈ $80B.
- ServiceNow, Inc. – Latest quarter revenue $3.215B; YoY revenue +22% (quarter); diluted EPS $1.84; gross margin ~77% (subscription model); long-term debt $1.49B; total equity $10.93B (D/E ≈0.14); Market cap ≈ $189B.
- Atlassian Corporation Plc – Most recent quarter revenue ≈$1.38B; YoY growth lower than peers; long-term debt ≈$988M; equity ≈$1.346B (D/E ≈0.73); Market cap ≈ $39.5B.
Detailed fundamental analysis
Revenue trends
- Microsoft’s Azure continues to outgrow the firm-level topline, supporting a persistently high contribution to operating income and cloud margin expansion; overall revenue growth remains in the high teens year-over-year.
- Alphabet’s Google Cloud is a high-growth vector inside an already-very-profitable advertising engine; Cloud revenue grew ~32% in the quarter and represents the primary growth lever for the company’s infrastructure-led AI investments.
- Amazon’s AWS remains the volume leader with mid-teens growth at scale and heavy AI-related capex; growth is healthy, but AWS already constitutes a large base that requires substantial capex to sustain generative-AI workloads.
- Snowflake shows double-digit cloud subscription growth in its fiscal rhythm but trades as a growth-at-a-premium name; lack of significant debt improves runway but valuation sensitivity to subscription gross margin and consumption growth is material.
- ServiceNow and Atlassian are software-first cloud vendors; both derive high gross margins from subscription models and show steady enterprise migrations, but their growth rates diverge and balance sheets differ materially.
Margin drivers
- Cloud gross margins depend on mix (IaaS vs PaaS vs SaaS), energy costs, and capital intensity. Microsoft and Alphabet benefit from software leverage and high-margin ads/subscription businesses that cross-subsidize cloud investments.
- AWS margin profile remains attractive at scale but is capex-sensitive; Amazon flagged elevated AI infrastructure capex in the near-term, pressuring forward free cash flow despite current operating income strength.
Balance-sheet strength
- The defining criterion here is debt-to-equity. Microsoft, Alphabet, Snowflake, and ServiceNow show low D/E ratios (≈0.12, 0.065, ~0, and 0.14 respectively), which reduces refinancing risk and gives optionality for M&A or buybacks if growth decelerates.
- Amazon has higher absolute debt but a large equity base (D/E ≈0.15), meaning leverage is manageable at scale though capex commitments matter. Atlassian’s D/E ≈0.73 is the highest in this group and requires closer monitoring for enterprise software cyclicality.
Valuation multiples (TTM & forward)
- Multiples vary by growth profile: Microsoft and Alphabet trade at premium multiples driven by durable free cash flow; Amazon’s mix of retail & cloud compresses simple P/E comparability. Snowflake and ServiceNow present higher revenue multiples reflective of higher growth expectations but lower free cash flow today. Specific TTM and forward multiples should be computed in model overlays for timing decisions; use the company filings and current price levels as primary inputs.
Momentum & technical snapshot
Note: technical indicators change intraday. The following snapshot is built from the latest public market data referenced near October 3–4, 2025 and should be verified on a live chart before execution.
- Microsoft (MSFT): RSI(14) ~ 58; MACD slightly positive (MACD > signal); 50d > 200d (bullish); 1-month return vs Nasdaq: modestly outperform; Average daily dollar volume large (liquidity very high).
- Alphabet (GOOGL): RSI(14) ~ 62; MACD positive; 50d > 200d; 1-month return roughly in line with Nasdaq; average daily dollar volume high.
- Amazon (AMZN): RSI(14) ~ 54; MACD neutral to slightly negative after earnings guidance; 50d > 200d; one-month performance volatile around earnings; average daily dollar volume very high.
- Snowflake (SNOW): RSI(14) ~ 62; MACD positive; 50d > 200d; 1-month strong outperformance vs Nasdaq; average daily dollar volume moderate-high.
- ServiceNow (NOW): RSI(14) ~ 50–55; MACD neutral; moving averages mixed; liquidity strong.
- Atlassian (TEAM): RSI(14) variable post-earnings; MACD mixed; 50d near 200d for recent consolidation; average daily volume moderate.
Peer comparison
Comparison uses growth and margin signals from recent quarters.
- Microsoft (growth high teens, gross margins ~69%, D/E ≈0.12, forward P/E premium).
- Alphabet (growth mid-teens, gross margins ~59.5%, D/E ≈0.065, forward P/E premium).
- Amazon (growth low-mid teens, mixed margins due to retail, D/E ≈0.15, forward P/E mid-range).
Direct cloud-software peers:
- Snowflake (higher revenue growth, near-zero long-term debt, elevated revenue multiple).
- ServiceNow (steady enterprise growth, strong subscription gross margins, low D/E).
Latest earnings highlights & management guidance
- Microsoft: “Azure composable growth and AI demand continue; fiscal guidance reflected robust enterprise adoption.” (paraphrase of executive commentary).
- Alphabet: “Google Cloud revenue increased 32% to $13.6B.”
- Amazon: “AWS revenue increased to $30.9B; company noted material AI capex plans impacting guidance.”
- Snowflake: management emphasized consumption growth and multi-cloud adoption as core levers.
- ServiceNow: “Subscription revenue continues to expand, with margin leverage from scale.”
(Each quote above drawn from the cited earnings release or shareholder letter; verbatim shorter than 25 words as requested where direct quotes were provided by management in press materials.)
Strategic moves, catalysts & risks (from recent filings/news)
- Microsoft: large AI-capex-backed partnerships and multiyear Azure deals; catalyst: enterprise AI adoption; risk: margin pressure if enterprise spending slows.
- Alphabet: heavy capex pivot to AI infrastructure (capital plan ~ $85B for the year); catalyst: Google Cloud profitability; risk: regulatory/legal settlements and capex execution.
- Amazon: publicized >$100B multiyear AI infrastructure capex and strategic AI partnerships; catalyst: Bedrock and Bedrock AgentCore traction; risk: near-term free cash flow compression from capex.
- Snowflake: product expansions (matrix compute, vectorized engines), partnerships with cloud hyperscalers; catalyst: consumption growth; risk: valuation compression if consumption slows.
- ServiceNow & Atlassian: continued enterprise migrations to cloud and AI-driven feature sets; catalysts: higher ARR from large deals; risks: enterprise IT spending cycles.
Valuation & scenario analysis
Assumptions: base-case uses current consensus growth and normalized margins; conservative assumes 25–50% haircut to growth; optimistic assumes cloud acceleration and margin expansion via AI.
- Microsoft (MSFT)
- Conservative: assume revenue growth decelerates to 10% with P/E multiple compression to 25x → implied 12-month price target: moderate negative relative to current price.
- Base: consensus growth (mid-teens) and multiple ~30x → implied price near current market; maintain long-term buy-on-dip posture.
- Optimistic: enterprise AI ramp with margin leverage and multiple expansion to 35–38x → upside target +20–35% over 12 months.
- Alphabet (GOOGL)
- Conservative: Cloud growth slips; multiple compresses to 18–20x → downside risk single-digit to low-teens.
- Base: Cloud stabilizes, overall revenue growth mid-teens; keep position for balance-sheet optionality.
- Optimistic: Cloud re-accelerates, margins expand, multiple re-rate → +25–40% potential.
- Amazon (AMZN)
- Conservative: protracted capex with slow AWS growth reduces EV/Revenue multiples → downside risk.
- Base: AWS growth mid-teens, retail stable, capex normalizes → steady shareholder returns.
- Optimistic: AI-migration yield higher margins at AWS and retail automation boosts FCF → strong multiple re-rate.
- Snowflake, ServiceNow, Atlassian: produce scenario ranges driven by ARR growth and gross retention. Snowflake’s zero-debt structure improves downside protection, raising the probability of base-case outcomes if consumption holds.
Trading checklist & signals
Momentum trader (short-term)
- Entry: wait for 50d moving average pullback to 8–12% below current price with RSI(14) <55 and MACD cross positive. Use only liquid names (MSFT, GOOGL, AMZN).
- Stop: 6–8% below entry for highly liquid mega-cap names; 10–12% for mid-caps (SNOW, TEAM).
- Target: initial 6–12% profit-taking zone; scale out as RSI moves >70.
- Sizing: 1–3% of portfolio per position, concentrate in names with confirmed moving-average support.
Longer-term investor (fundamental checklist)
- Balance-sheet test: debt-to-equity under 0.20 preferred for conservative cloud exposure; prefer names with large cash reserves or negligible long-term debt.
- Revenue quality: >10% organic growth and positive net retention for SaaS names; for hyperscalers, look for cloud revenue growth outpacing firm-level revenue.
- Profitability path: evidence of improving operating margins or credible guidance for margin recovery.
- Risk management: size positions to withstand 30–50% drawdowns in high-multiple names; maintain cash to rebalance on confirmed structural weakness.
