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.
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.
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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 “no respect” 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.
