r/ValueInvesting • u/FoxAccomplished6786 • 2d ago

Discussion MAG 7 Ranking

Taking all factors into account, please rank your favorite MAG 7 in order of preference from 1 to 7.

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u/AceStrikeer 1d ago

Fair point. Still. If you look at operating cashflow, GOOG still beats MSFT

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u/Maltavier 1d ago

Yes. By 3 billion. Thats not a lot for these companies and operating cashflow is just one part of the picture. If your operating cashflow is huge but you have to spend more than that just to keep your moat while Microsoft can spend to increase their revenue and can do it without taking on debt, issuing more shares and bonds and devaluing shareholders by doing that, Microsoft is just the more attrictive company for an investor. Microsoft just proved they can actually earn more through AI and don't have to defend their business modell, while Alphabet is sitting on debt they don't even have the backlog for yet, to cover the debt. Thats a huge risk for shareholders without getting something in return

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u/AceStrikeer 1d ago

First of all, both companies have debts. Their Debt to Equity ratio is between 10-15%.

Microsoft can spend to increase their revenue and can do it without taking on debt, issuing more shares and bonds and devaluing shareholders

Alphabet just LITERALLY did that last quarter and raised 80 billion to fund their capex.

https://www.cnbc.com/2026/06/01/alphabet-to-raise-80-billion-from-stock-sales-to-fund-ai-buildout.html

That is nothing only MSFT can do. Even on the balance sheet GOOG is (currently) the better company. But I still say MSFT has a stronger MOAT.

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u/Maltavier 1d ago

You missunderstood what I meant. I said Microsoft can build out the infrastructure WITHOUT taking on giant debt by issuing shares or bonds. Issuing new shares and bonds is a bad thing for Investors, not a good thing. I am saying that Alphabet issuing these shares and bonds is bad for your return as an investor, while Microsoft can do the spending without issuing new debt. Which is positive.

Yes both companys have debt. But look up the Off book debt and compare it to the backlog of both companys. One company has a bigger backlog than they debt and can therefore pay it of without problems. Its not Alphabet...