In a recent interview with Schwab Network, analysts discussed the potential impact of Microsoft Corporation (NASDAQ:MSFT) Azure on Alphabet Inc.’s (NASDAQ:GOOGL) Google AI business and why they think the Sundar Pichai-led company could be at risk.



<h2>Google’s Search Business At Risk?</h2>



On Wednesday, John Freeman, Co-Founder and Senior Analyst at Ravenswood Partners, highlighted the potential impact of Microsoft’s Azure on Google’s AI business, particularly in the context of the upcoming ChatGPT 6 and the Gemini 3. Johnson pointed out that Google’s traditional business model, which relies on providing links instead of giving direct answers, has been impacted by ChatGPT, and this shift could potentially cut into Google’s revenues. 



“Anything on the margin that clips it, I think would really…hurt the stock,” he stated. 



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Freeman expressed his preference for Microsoft over Google as a stock, citing Microsoft’s Azure as the leading AI cloud provider and its potential for future growth. He added that Microsoft’s Azure is not only the leading AI cloud provider but also has a strong influence on the developer community, which further strengthens its position in the AI market.



“And you don’t have the downside risk of generative AI disruption. I mean, you’ve got Microsoft 365 and Windows. Those are not likely to be disrupted by AI anytime soon,” he added. 



Corey Johnson, chief market strategist at Epistrophy Capital Research, echoed Freeman’s opinion on Google and stated that what Google is doing with AI erodes the core offerings of its business of generating revenue through clicks. 



“Their business is at inherent risk because of the cannibalization of AI,” he stated.



<h2>Analysts Divided Over Google’s Prospects</h2>



The analysts’ observations align with recent developments in the AI space. Wedbush analyst Dan Ives says Wall Street is underestimating Microsoft, arguing the company is getting &#34;no respect&#34; despite being positioned for significant AI-driven growth in 2026, with its cloud business seen as a key winner in strategic AI deployments.



Meanwhile, Microsoft is ramping up its cloud and AI expansion with billions in global infrastructure investments, including its largest-ever commitment in Canada. The company plans to invest $19 billion CAD ($13.85 billion) between 2023 and 2027 to build new digital and AI infrastructure, boost data center capacity by late 2026, and advance digital sovereignty and AI skills across the country.



That being said, some analysts also feel that Wall Street has already moved away from seeing AI as a threat to Google’s search business and considers it as a &#34;giant opportunity.&#34; Landon Swan, co-founder of LikeFolio, says that he is highly optimistic about the company's ability to leverage the technology.



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 Benzinga's Edge Rankings place Microsoft in the 81st percentile for quality and the 52nd percentile for momentum, reflecting its strong performance in both areas. At the same time, Google’s quality score is better at the 94th percentile. Check the detailed report here.  



Price Action: Over the past year, Microsoft stock surged 15.54%, while Google soared 64.61%. On the last trading day of 2025, Microsoft stock closed 0.79% lower at $483.62, while Google fell 0.24% to close at $313.80, as per data from Benzinga Pro. 



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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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Analysts recently discussed the competitive landscape between Microsoft and Google in the AI sector, emphasizing Microsoft's Azure as a leading AI cloud provider. John Freeman from Ravenswood Partners expressed a preference for Microsoft, citing its resilience against generative AI disruptions, while Corey Johnson noted that Google's traditional revenue model is at risk due to AI cannibalization. Despite differing opinions on Google's prospects, analysts agree that Microsoft's investments in AI and cloud infrastructure position it for significant growth. Over the past year, Microsoft stock rose 15.54%, while Google increased by 64.61%.

- Analysts discussed the potential impact of Microsoft Azure on Google’s AI business, highlighting risks to Google's search revenue due to AI advancements.  
- John Freeman emphasized Microsoft's dominance in the AI cloud sector and its sustainable business model, contrasting it with Google's click-based revenue which faces threat from AI cannibalization.  
- While some analysts remain optimistic about Google's prospects in leveraging AI as an opportunity, Microsoft's strategic investments may position it for significant growth in the AI market by 2026.

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Why This Analyst Prefers Microsoft Over Google In The AI Race— 'You Don't Have The Downside Risk Of...'