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Cramer Bullish on Microsoft, Cautious on Alphabet

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  Published in Stocks and Investing on Tuesday, February 3rd 2026 at 13:28 GMT by CNBC
      Locales: California, Washington, Texas, UNITED STATES

New York, NY - February 3rd, 2026 - CNBC's Jim Cramer offered a starkly contrasting outlook on two tech giants - Microsoft (MSFT) and Alphabet (GOOGL) - as both companies approach their respective earnings reports. Cramer, known for his rapid-fire analysis and market predictions, is decidedly bullish on Microsoft, urging investors to consider a position ahead of its Tuesday release, while expressing considerable caution regarding Alphabet's Thursday report.

Speaking on his show "Mad Money" Monday, Cramer emphasized a fundamental difference in momentum between the two companies. "I'm looking at Microsoft in a completely different light than I am at Alphabet," he stated. "Microsoft has just been moving, and Alphabet has been moving...slowly." This isn't simply a short-term observation, but reflects a broader assessment of their strategic direction and execution.

The core of Cramer's optimism surrounding Microsoft lies in its robust cloud computing business, Azure. Over the past several years, Microsoft has successfully transitioned from a traditional software provider to a dominant force in cloud services, consistently outpacing competitors in revenue growth. Azure's strength isn't just in its technological capabilities, but also in its broad adoption across various industries, including enterprise, government, and increasingly, smaller businesses. This diversified customer base provides a degree of resilience against economic fluctuations.

However, the cloud isn't Microsoft's sole strength. Cramer highlighted the company's proactive approach to Artificial Intelligence (AI). While many tech firms are still in the exploratory phase, Microsoft has demonstrably integrated AI into its existing product suite - from Copilot in Office 365 to advanced AI features in Azure. "They're not just talking about AI, they're delivering," Cramer asserted, indicating that Microsoft is translating its AI investments into tangible, revenue-generating products.

This emphasis on delivery is crucial. The market has shown a growing impatience with companies making lofty promises about AI without showcasing concrete results. Microsoft's execution in this arena is viewed as a key differentiator, potentially justifying a premium valuation.

In contrast, Cramer expressed significant concerns about Alphabet. The primary driver of this pessimism is the slowing growth of Alphabet's advertising business, the company's traditional revenue engine. While still a behemoth, the digital advertising landscape is becoming increasingly competitive. TikTok, Amazon, and other platforms are eroding Alphabet's market share, forcing it to innovate and adapt to maintain its dominance. The company's investment in areas beyond advertising, such as Waymo (autonomous vehicles) and Verily (life sciences), haven't yet yielded substantial returns to offset any declines in core ad revenue.

Furthermore, Cramer pointed to Alphabet's cost structure as a major concern. The company has been investing heavily in new ventures and maintaining a large workforce, but without commensurate growth in profitability. "I'm concerned about how much they're spending," he said. "It doesn't feel like a company that's growing right now." This perception of bloated expenses raises questions about Alphabet's ability to navigate a potentially challenging economic environment. Analysts are carefully watching for signs of cost discipline and improved efficiency in the upcoming earnings report.

Looking Ahead: Earnings Reports as Catalysts

Both Microsoft and Alphabet's earnings reports will be closely scrutinized. For Microsoft, investors will be looking for continued strength in Azure, further evidence of successful AI integration, and guidance that suggests sustained growth. A positive report could solidify Microsoft's position as a leading tech innovator and drive its stock price higher.

Alphabet, on the other hand, needs to demonstrate a clear path to revitalizing its advertising business, managing costs effectively, and showcasing progress in its long-term ventures. A disappointing report could trigger a sell-off and raise doubts about the company's future prospects.

The market reaction to these earnings reports will likely have broader implications for the tech sector as a whole. Cramer's divergent outlook suggests that a period of differentiation is underway, where execution and strategic focus will be rewarded, while companies struggling to adapt will face increased pressure. As of Monday's close, Microsoft shares rose 0.7% while Alphabet shares fell 0.9%, reflecting the initial market sentiment aligned with Cramer's analysis.