Microsoft, Meta, and Alphabet Stocks Are All Getting Hammered. But I Think Only 1 Is Worth Buying

The stocks of Microsoft (NASDAQ: MSFT), Meta Platforms (NASDAQ: META), and Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) are all taking a beating right now. As of this writing, Meta shares had plunged more than 8% on Thursday alone, while Alphabet and Microsoft are also sliding sharply. And this puts the stocks' total year-to-date returns at declines of 24% for Microsoft, 17% for Meta, and 10% for Alphabet.

The sell-off likely reflects a continued broader market reevaluation of the massive capital expenditures required to build out artificial intelligence (AI) infrastructure and geopolitical uncertainty. In addition, part of their sell-offs could simply reflect shares taking a breather after impressive gains over the three-year period from the start of 2023 to the end of 2025.

Of course, the question on many investors' minds right now is likely whether any of these beaten-down tech giants are actually worth buying. When you compare the three side by side, looking closely at their underlying businesses, growth drivers, and opportunities, I believe only one is a compelling buy right now.

Image source: Getty Images.

Microsoft: Cloud growth is lagging Alphabet's

Microsoft's business remains a powerhouse, but it faces severe risks. In its second quarter of fiscal 2026 (which ended on Dec. 31, 2025), the software giant's revenue rose 17% year over year to $81.3 billion.

Management called out Microsoft's impressive growth in its Microsoft Cloud, a revenue category that combines the company's various cloud services.

"Microsoft Cloud revenue crossed $50 billion this quarter, reflecting the strong demand for our portfolio of services," explained Microsoft chief financial officer Amy Hood in the company's fiscal second-quarter earnings release.

But under the surface, Microsoft's cloud computing business is growing much slower than Alphabet's. Microsoft's Azure and other cloud services revenue -- the cloud computing portion of Microsoft's cloud revenue -- increased 39% year over year. While that is a strong figure, it falls short of Alphabet's Google Cloud's recent expansion. Further, Microsoft's cloud computing business still trails Amazon's (NASDAQ: AMZN) Amazon Web Services (AWS) in sheer size, so it's not leading in growth rate or scale.

And there's also a concern that Microsoft's software business could go through a challenging period as it adapts to a world increasingly driven by AI. At the same time, Alphabet continues to gain ground with its own productivity suite, presenting a real competitive threat to Microsoft's long-standing dominance in the enterprise space.

Meta: Too reliant on social media

Meta Platforms is also facing a difficult setup. The company's fourth-quarter revenue (for the period ended Dec. 31, 2025) rose nearly 24% year over year to $59.9 billion.

But Meta arguably remains too heavily tethered to its core business -- social media. This lack of diversification makes the stock inherently risky, especially if digital advertising budgets tighten or consumer engagement shifts toward newer platforms.

Even more concerning is the company's profitability trend.

Meta's fourth-quarter earnings per share rose just under 11% year over year to $8.88, even though revenue rose 24%. This slowing earnings growth is a glaring red flag, particularly because it is happening even before capital expenditures ramp up to the company's planned levels for 2026. Management expects its 2026 capital expenditures to climb to a staggering range of $115 billion to $135 billion as it buys compute power to fuel its AI ambitions. With earnings growth already decelerating, that aggressive spending profile leaves very little room for error.

Alphabet: The better buy

Alphabet, meanwhile, offers the most attractive mix of growth and stability. The company's fourth-quarter revenue increased 18% year over year to $113.8 billion.

But the company's standout performer was its cloud computing segment. Google Cloud revenue surged an incredible 48% year over year to nearly $18 billion. This means Google Cloud is growing substantially faster than Amazon and Microsoft's cloud computing businesses. And the segment is becoming a major profit driver, with Google Cloud's operating income more than doubling year over year to more than $5 billion in the quarter.

Meanwhile, Alphabet's dominance in search provides a highly profitable foundation that funds these aggressive AI and cloud initiatives. Combining double-digit top-line growth in search with its accelerating cloud-computing business, the company's earnings per share in the fourth quarter jumped more than 31% year over year to $2.82, highlighting its superior profit trajectory.

Of course, Alphabet is also spending heavily. Management guided for 2026 capital expenditures of $175 billion to $185 billion. A legitimate risk to consider is that if the AI payoff takes longer than expected, this staggering spending could squeeze margins more than investors anticipate. But Alphabet's diversified, rapidly growing business and accelerating cloud platform arguably make it better equipped to handle this investment cycle than its peers.

With the stock trading at a price-to-earnings ratio of roughly 26 as of this writing, I believe this is a good entry point given its accelerating cloud business and enduring dominance in search.

Ultimately, I believe Alphabet is the clear winner here and the best stock to consider buying on this dip.

Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.