Apple Inc. (AAPL)vs Alphabet Inc. (GOOGL)

Quick verdict

One company sells hardware you hold in your hand; the other sells attention and compute. Apple's trailing twelve months to 27 June 2026 produced revenue of $466.8bn and free cash flow of $136.7bn, with demand tied to consumer upgrade cycles. Alphabet, on figures to 30 June 2026, turned over $445.9bn with advertising as its engine, and growth running far faster: revenue compounded 12.5% a year from fiscal 2022 to fiscal 2025, against 1.8% at Apple. On our scorecard the pair finish level at 3 points apiece. Alphabet takes valuation and growth; Apple takes capital returns and shareholder income. The balance-sheet factor could not be scored because Apple's reported interest expense was unavailable, so no interest-coverage figure exists for it, and momentum is never scored here as we hold no licensed share-price history. Both are quality businesses responding to different economic forces.

At-a-glance comparison

Not scored — Balance sheet: no interest coverage for AAPL. Momentum: no share-price return data for either company. A factor missing a figure for either company cannot be won by either, so it adds half a point to each score, as a tie does.

Business model and revenue mix

Apple designs and sells iPhone, Mac, iPad and wearables, alongside a services arm spanning the App Store, iCloud, Apple Music and Apple Pay — a hardware installed base monetised twice. Alphabet runs Google Search, YouTube, Android and Google Cloud, with advertising the main revenue source and cloud the capital-hungry adjacency. The sector labels differ accordingly: Consumer Electronics within Technology for Apple, Internet Content & Information within Communication Services for Alphabet. Scale is comparable at the top line — $466.8bn against $445.9bn in their respective trailing twelve-month periods — but the cash profiles diverge sharply. Apple converted that revenue into $136.7bn of free cash flow; Alphabet into $53.3bn, roughly two-fifths as much, despite reporting the higher gross margin. Both list on Nasdaq and both are US-domiciled. Each reports a conventional operating-income line, so no proxy measure is needed.

Valuation

Alphabet carries the verdict here, and on most visible yardsticks it is the cheaper of the two at the 14 October 2026 close. Price-to-sales sits at 9.6 versus 10.7, EV/EBITDA at 25.0 versus 30.1, and price-to-book at 6.7 against Apple's 46.6 — a gap driven largely by Apple's slim $107.5bn equity base after years of buybacks, which makes book value a poor anchor for it. Apple's trailing P/E is 39.3 and its PEG 5.7. No P/E or PEG is shown for Alphabet: its trailing net income of $244.2bn stands far above operating profit of $147.6bn, a gap reflecting non-operating gains, so earnings-based multiples were withheld as uninformative. On free cash flow the ranking reverses — Apple yields 2.73% against Alphabet's 1.24%, reflecting Alphabet's heavier investment spend.

Growth profile

Expansion rates are where the pair separate most decisively, and Alphabet wins the factor outright. From fiscal 2022 to fiscal 2025, Alphabet's revenue compounded at 12.5% a year and earnings per share at 33.3%; over the longer run from fiscal 2020 the figures are 17.2% and 29.8%. Apple's equivalents are markedly slower: 1.8% revenue growth over the three-year window and 8.7% over five, with EPS compounding 6.9% and 17.9% respectively. Apple's three-year revenue figure is close to flat, so its earnings growth over that span came from margin and share count rather than volume — the buyback yield of 1.64% is part of that arithmetic. Alphabet grew both lines at double digits on every window shown. On absolute size Apple remains slightly the larger by revenue, but the trajectory belongs to Alphabet.

Profitability and quality

Margins tell a more even story than growth does. Alphabet earns the wider gross margin at 60.9% against Apple's 48.65%, which is what one expects from a business selling digital inventory rather than assembled hardware. Below that line the two converge almost exactly: operating margin of 33.17% at Apple and 33.11% at Alphabet, both measured on reported operating-income lines. Apple's net margin is 27.62%; no net margin is printed for Alphabet, because trailing net income of $244.2bn far exceeds its $147.6bn of operating profit and the resulting ratio would describe non-operating gains rather than trading performance. In dollar terms Apple's operating profit of $154.9bn edges Alphabet's $147.6bn. Cash conversion is the sharper distinction: $136.7bn of free cash flow at Apple versus $53.3bn at Alphabet.

Balance-sheet risk

This factor could not be scored, because no interest-coverage figure is available for Apple — that calculation needs both operating profit and a reported interest expense, and the latter is absent. The gap is Apple's alone; Alphabet reports coverage of 65.55 times. What can be compared is leverage, and it is modest on both sides. As at 27 June 2026 Apple held $39.5bn of cash against $84.3bn of total debt, giving net debt of 0.27 times EBITDA. Alphabet, as at 30 June 2026, held $55.9bn of cash against $100.2bn of debt, for a near-identical 0.26 times. Liquidity differs more: Alphabet's current ratio of 2.72 is well above Apple's 1.0, where current assets and liabilities are effectively matched — a long-standing feature of Apple's working-capital management rather than a sign of strain.

Price performance and shareholder returns

Capital efficiency is Apple's clearest win, and it takes the quality factor. Return on invested capital of 84.1% dwarfs Alphabet's 17.6%, a difference in kind rather than degree: Apple runs an outsourced manufacturing model on a small asset base, while Alphabet funds data centres and cloud infrastructure out of a $640.5bn equity base. Apple's return on equity of 148.75% should be read with care — it is flattered by that same shrunken equity of $107.5bn, itself a product of sustained buybacks, so ROIC is the fairer measure of the two. No return on equity is shown for Alphabet. On shareholder income, Apple also leads: a 0.31% dividend yield on a 12.13% payout ratio plus a 1.64% buyback yield, against Alphabet's 0.24% yield, 4.22% payout and 0.41% buyback yield.

Which stock fits which investor

The split is clean. An investor focused on valuation or growth is pointed toward Alphabet, on EV/EBITDA of 25.0 and three-year revenue compounding of 12.5%. One focused on capital returns or dividend income is pointed toward Apple, on ROIC of 84.1%, a 0.31% yield and a 1.64% buyback yield — modest in absolute terms, but ahead of Alphabet on both. Note that the income pick rests on dividend yield alone and the quality pick on return on invested capital alone. Apple is tagged mature, high-quality; Alphabet simply high-quality. Neither tag resolves the 3-3 overall score, which reflects genuinely different strengths rather than a narrow margin. Momentum is absent from the scoring entirely, so relative share-price performance forms no part of this comparison.

• Value: GOOGL
• Growth: GOOGL
• Income: AAPL
• Quality: AAPL

Frequently asked questions

Why is there no P/E ratio shown for Alphabet?

Alphabet's trailing net income of $244.2bn for the twelve months to 30 June 2026 sits far above its operating profit of $147.6bn, a gap arising from non-operating gains. An earnings multiple built on that figure would describe one-off items rather than trading performance, so the P/E and PEG were withheld. Apple's are shown: 39.3 and 5.72 respectively, at the 14 October 2026 close.

Which company is larger?

By market capitalisation Apple is larger at $5,005.2bn against Alphabet's $4,279.1bn at the 14 October 2026 close. By revenue the gap is narrower: $466.8bn for Apple in the twelve months to 27 June 2026, versus $445.9bn for Alphabet to 30 June 2026.

Why does Apple's price-to-book look so high?

Apple's price-to-book of 46.55 reflects shareholders' equity of just $107.5bn as at 27 June 2026, held down by years of buybacks. Alphabet's equity of $640.5bn produces a price-to-book of 6.68. For Apple, EV/EBITDA of 30.07 or the 2.73% free cash flow yield are more informative anchors.

Which generates more free cash flow?

Apple, by a wide margin: $136.7bn in the twelve months to 27 June 2026, against $53.3bn at Alphabet to 30 June 2026 — roughly two and a half times as much, despite similar revenue. That difference drives the free cash flow yields of 2.73% and 1.24%.

Why was the balance-sheet factor not scored?

Interest coverage requires both operating profit and a reported interest expense, and no interest expense figure is available for Apple. Alphabet's coverage is 65.55 times. Leverage itself is comparable and low: net debt of 0.27 times EBITDA at Apple and 0.26 times at Alphabet.

Go deeper: guides for this comparison

• Big tech compared: Apple, Microsoft, Alphabet, Meta and Amazon by the numbersThe largest technology companies on one table — growth, margins, the cash cost of the AI build-out, and what each valuation assumes — built from their SEC filings.
• Balance-sheet risk: net debt, interest cover and the current ratioThe three numbers that show whether a company can carry its debt, how to read each one, and what they reveal about Pfizer, Intel, Disney and Palantir.
• EV/EBITDA explained: valuing the whole business, not just the sharesHow enterprise value and EBITDA work, why EV/EBITDA and P/E can disagree by a mile, its blind spots, and what the gap tells you about Alphabet, Amazon and Micron.
• Free cash flow yield: the valuation measure that is hardest to fakeWhy cash beats reported earnings, how free cash flow yield works, and what the gap between profit and cash reveals at Apple, Amazon, Microsoft and Salesforce.

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