Microsoft Corporation (MSFT)vs Salesforce, Inc. (CRM)

Quick verdict

Scale is the first thing to register here: Microsoft carried a market value of roughly $3,710.5bn at the 4 September 2026 close against about $213.3bn for Salesforce, and booked $331.8bn of revenue in the fiscal year to June 2026 versus $43.9bn for Salesforce in the twelve months to July 2026 — around seven-and-a-half times the sales on roughly seventeen times the market value. That gap frames everything else. Microsoft wins on quality (46.78% operating margin, 27.1% ROIC) and on the balance sheet (net debt of just 0.1 times EBITDA). Salesforce takes valuation, growth and income, though its growth score leans on an earnings figure measured from a depressed 2023 base. On our scoring Salesforce edges ahead 3.5 to 2.5; momentum is a tie. Microsoft is tagged high-quality, Salesforce a blend — two different propositions rather than one better stock.

At-a-glance comparison

Business model and revenue mix

Both sell enterprise software by subscription, but the breadth differs sharply. Microsoft spans cloud infrastructure through Azure, productivity software in Microsoft 365, Windows, LinkedIn, GitHub and Xbox gaming — a portfolio classified under Software—Infrastructure and generating $331.8bn of revenue in the year to June 2026. Salesforce sits in Software—Application, selling cloud-based customer-relationship-management tools plus related data, analytics and AI products, on $43.9bn of revenue in the twelve months to July 2026. The reporting calendars differ too: Microsoft's fiscal year ends in June and the figures here are full-year; Salesforce's ends in January, so its numbers are trailing twelve months combining the latest fiscal year with year-to-date. Salesforce's narrower focus shows in a higher gross margin of 77.28% against Microsoft's 67.94%, while Microsoft's hardware, gaming and infrastructure mix dilutes that line.

Valuation

On the multiples our data holds, Salesforce is the cheaper of the two and takes the valuation verdict. At the 4 September 2026 close it traded on 23.74 times trailing earnings and 4.86 times sales against Microsoft's 27.84 and 11.18 — the sales gap being the wider of the two by a distance. Price-to-book runs 5.56 versus 8.39. The free-cash-flow yield is the starkest contrast: 7.10% at Salesforce against 1.81% at Microsoft, reflecting $15.2bn of free cash flow on a $213.3bn market value versus $67.0bn on $3,710.5bn. One caveat: Salesforce's PEG of 0.10 is arithmetically driven by the 233.65% three-year EPS growth rate measured from fiscal 2023, so it should not be read as a genuine growth-adjusted discount. Microsoft's PEG of 1.22 rests on far steadier inputs. On EV/EBITDA Microsoft is actually lower, at 19.2 times versus 23.89.

Growth profile

Salesforce wins the growth factor, but the reasons need unpacking. Its three-year revenue CAGR to fiscal 2026 was 9.82%, below Microsoft's 16.12% over the same span from fiscal 2023; across five years from fiscal 2021 the two are close, 14.34% against 14.57%. The separation comes from earnings: Salesforce's EPS compounded at 233.65% a year from fiscal 2023, a rate that says far more about how low the 2023 starting point was than about the underlying trajectory. Over five years from fiscal 2021 its EPS CAGR is 12.23%, below Microsoft's 17.40% — the more informative comparison. Microsoft, then, has grown both lines faster on a three-year view and grown earnings faster over five years, while Salesforce's headline figure is flattered by its base. Read on five-year numbers, revenue growth is near-identical and Microsoft leads on earnings.

Profitability and quality

Quality goes to Microsoft, and the margins explain why without much argument. Operating margin of 46.78% in the year to June 2026 more than doubles Salesforce's 19.88% over the twelve months to July 2026, and net margin of 40.31% compares with 21.99% — despite Salesforce holding the better gross margin at 77.28% versus 67.94%. The whole difference sits below the gross line, in operating cost. Returns on capital tell the same story: Microsoft earned 27.1% on invested capital against 9.8%, and 34.04% on equity against 19.38%. Salesforce's ROE deserves a caveat — a 16.44% buyback yield has been shrinking the equity base against which that return is measured, so the gap to its 9.8% ROIC is partly a capital-structure effect. Microsoft's ROE-to-ROIC gap is narrower and its absolute returns higher on both measures.

Balance-sheet risk

Here the difference is one of degree rather than direction, and Microsoft takes it clearly. Both carry similar gross debt in dollar terms — $40.3bn at Microsoft as at 30 June 2026, $39.3bn at Salesforce as at 31 July 2026 — but the earnings supporting it are worlds apart. Net debt sits at 0.1 times EBITDA for Microsoft against 3.03 times for Salesforce, and interest cover runs 50.88 times versus 8.92 times. Microsoft also held $20.9bn of cash against Salesforce's $8.3bn, and its current ratio of 1.23 compares with 0.84, meaning Salesforce's current liabilities exceeded current assets at the balance-sheet date — common enough where deferred subscription revenue is large, but still a thinner liquidity cushion. Neither looks stretched on cover, yet Microsoft has materially more headroom relative to the size of its obligations.

Price performance and shareholder returns

Shareholder returns favour Salesforce on our scoring, and buybacks are the reason. Dividend yields are effectively level — 0.73% at Microsoft against 0.71% at Salesforce — as are the payout ratios, 19.77% and 15.68% respectively, both leaving ample retained earnings. The divergence is in repurchases: Salesforce's buyback yield of 16.44% dwarfs Microsoft's 0.60%, a figure large enough to be the dominant component of its total distribution and consistent with the shrinking equity base noted earlier. Whether that pace is repeatable is not something these figures settle. In absolute terms Microsoft paid $3.64 per share in dividends over the year to June 2026 against Salesforce's $1.84 over the twelve months to July 2026, on trailing EPS of $17.95 and $10.92. For income measured by yield alone, the two are near-indistinguishable; for total capital return, Salesforce is well ahead.

Which stock fits which investor

The split in our factor verdicts maps neatly onto styles. Investors prioritising quality land on Microsoft: 46.78% operating margins, 27.1% ROIC and net debt at 0.1 times EBITDA describe a business with both pricing power and balance-sheet slack, and the high-quality tag reflects that. Those weighting valuation, growth or shareholder distributions land on Salesforce — 4.86 times sales, a 7.10% free-cash-flow yield and a 16.44% buyback yield — with the caveat that its growth score rests on an EPS figure measured from a depressed fiscal 2023 base, and that its 0.84 current ratio and 3.03 times net leverage leave less room for error. Income seekers should note the yields are almost identical at 0.73% and 0.71%, so the choice there is about repurchases, not dividends. Momentum is a tie. Overall, Salesforce scores 3.5 to Microsoft's 2.5.

• Value: CRM
• Growth: CRM
• Income: CRM
• Quality: MSFT

Frequently asked questions

How much bigger is Microsoft than Salesforce?

Considerably. At the 4 September 2026 close Microsoft's market capitalisation was about $3,710.5bn against roughly $213.3bn for Salesforce — around seventeen times larger. On revenue the gap is narrower but still wide: $331.8bn for Microsoft's fiscal year to June 2026 versus $43.9bn for Salesforce's twelve months to July 2026, roughly seven-and-a-half times.

Which stock is cheaper?

Salesforce, on most of the measures available. It traded on 23.74 times trailing earnings and 4.86 times sales against Microsoft's 27.84 and 11.18, with a free-cash-flow yield of 7.10% versus 1.81%. The exception is EV/EBITDA, where Microsoft is lower at 19.2 times against 23.89. Salesforce's 0.10 PEG is distorted by its 233.65% three-year EPS growth rate from a low fiscal 2023 base.

Why is Salesforce's EPS growth rate so high?

Because of where the measurement starts. The 233.65% three-year EPS CAGR runs from fiscal 2023, a year in which earnings were depressed, so the figure reflects recovery from a low base rather than a sustainable rate. Over five years from fiscal 2021 the EPS CAGR is 12.23%, below Microsoft's 17.40% — the more representative comparison.

Which has the stronger balance sheet?

Microsoft. Gross debt is similar at $40.3bn versus $39.3bn, but Microsoft's net debt equals just 0.1 times EBITDA against 3.03 times at Salesforce, and interest cover is 50.88 times versus 8.92 times. Microsoft also held $20.9bn of cash to Salesforce's $8.3bn and a current ratio of 1.23 against 0.84.

Which pays more to shareholders?

Dividend yields are almost identical — 0.73% at Microsoft, 0.71% at Salesforce — with payout ratios of 19.77% and 15.68%. The difference is repurchases: Salesforce's buyback yield of 16.44% far exceeds Microsoft's 0.60%, which is why the income verdict goes to Salesforce on total capital returned rather than on dividends.

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