Microsoft experienced the announcement of third-quarter fiscal year 2025 results for the period ending March 31, 2025. The buoyant figures not only enabled a key market outreach that saw Microsoft dethrone Apple in the turn of being the largest company by capitalisation on Earth-the event obviously fees its weighty achievement; still, do favorable conditions put Microsoft maximum in the selection as a better buy presently among the so-called ‘Magnificent Seven’ other respective tech giants ruling the market? Let’s explore that.

Microsoft’s Strong Q3 Performance

Microsoft’s business is quite a bit more than just developing software for Word and Excel. It embraces various industries, including cloud computing, LinkedIn, gaming through Xbox, and the recent purchase of Activision Blizzard. In Q3, Microsoft posted good results from the different segments, but cloud computing stood out, with revenue growth of 21%.

Among the cloud segment, Azure was the top performer, with the cloud computing platform growing at a whopping 33%. Growth in cloud computing was fueled by two major trends- the burgeoning demand for AI workloads and the fact that entire enterprises are migrating to the cloud. Indeed, cloud computing does feel like the early stages with enterprises still moving towards adopting the technology as compared to the rest of the tech. All these aspects put Azure and, thus, Microsoft into an important growth driver and place the company to profit from the trend for several years.

Other Business Segments

Outside of cloud computing, Microsoft’s other divisions saw more modest gains. Revenue from productivity tools and business services went up by 10%, and the personal computing segment inched up by 6%. Even so, the outstanding performance of its cloud business helped lift the company’s total revenue by 13% compared to last year. Profits also saw a strong boost, with net income jumping 18% year over year.

Microsoft’s Valuation and Competition

Microsoft is clearly riding the wave of cloud computing growth, but investors should also look at how the stock is valued. Within the Magnificent Seven which includes Apple, Tesla, Nvidia, Alphabet, Amazon, and Meta Microsoft currently holds the highest forward price-to-earnings (P/E) ratio. That means it’s one of the priciest stocks relative to its expected growth.

While this premium valuation reflects confidence in Microsoft’s future, especially its cloud momentum, it doesn’t automatically make it the top pick in this group of tech powerhouses. Its growth outlook is solid, but when compared to some cheaper yet still fast-growing peers, it may not be the most compelling buy right now.

Where Does Microsoft Stand Among the Magnificent Seven?

When stacked against others in the Magnificent Seven, Microsoft starts to look a bit pricey. Companies like Nvidia and Alphabet not only offer stronger growth potential but also come with lower valuations. Alphabet, in particular, stands out as the most budget-friendly stock in the group, while Nvidia’s rapid growth skews the value comparisons in its favor.

So, even though Microsoft is clearly a leader in cloud computing and delivered an impressive quarter, its stock price feels a little steep relative to its expected growth. That doesn’t mean it’s a bad investment  far from it. Microsoft is still a strong, stable pick, just not the top value play right now. Instead, investors looking for more upside might find better opportunities with Nvidia or Alphabet. Microsoft lands comfortably in the middle and in a lineup this elite, that’s still a strong position to hold.