Despite being dwarfed in total revenue by both Microsoft Cloud and AWS, Google Cloud generated $4.8 billion in new Q2-over-Q1 revenue, topping AWS’s $4.6 billion, matching Microsoft Cloud’s number, and proving that in the here and now it has achieved full revenue parity with its larger rivals.
This measuring stick of new incremental revenue, in combination with growth rate, yields powerful insights into customers’ spending habits and reveals who’s winning new AI and cloud business right here and right now as opposed to aggregating big contract revenue from the past and rolling it forward.
And, while Microsoft and AWS are very properly proud of the huge and 100% legitimate revenue totals they’ve amassed in the past, we can gain additional insights into current market dynamics and customer preferences by isolating the incremental numbers from the most-recent quarter and using those as a barometer for who’s got the hot hand right now.
Take a look at this head-to-head-to-head comparison of incremental revenue growth for Q2 over Q1, and for Q1 over Q4 of 2025, for Google Cloud, Microsoft, and AWS:
| Company | Q2 Revenue | Q1 Revenue | Q2 Increm. Revenue |
|---|---|---|---|
| Google Cloud | $24.8 billion | $20.0 billion | $4.8 billion |
| Microsoft | $59.3 billion | $54.5 billion | $4.8 billion |
| AWS | $42.2 billion | $37.6 billion | $4.6 billion |
| Company | Q1 Revenue | Q4 Revenue | Q1 Increm. Revenue |
|---|---|---|---|
| Google Cloud | $20.0 billion | $17.7 billion | $2.3 billion |
| Microsoft | $54.5 billion | $51.5 billion | $3.0 billion |
| AWS | $37.6 billion | $35.6 billion | $2.0 billion |
As I’ve asked in the past, what conclusions can we draw from the fact that Google Cloud was able to match Microsoft’s $4.8 billion in incremental Q2 revenue in spite of the fact the Microsoft Cloud business is 2.4X bigger than Google Cloud’s? Here’s what I think:
- Microsoft’s huge impact is diminishing. First I need to tip my cap to Micrsoft for it excellent fiscal-Q4 performance; in no other industry in the world have companies so large ever grown — and grown consistently — at such scale. BUT — the numbers in the table above show that Microsoft Cloud’s outsized stature relative to Google Cloud ($59.3 billion in Q2 revenue versus $24.8 billion) is a function of the past, not of the present. To Microsoft’s credit, it has been and/or was the dominant cloud vendor of the past four or five years, and it deserves great credit for that.
- Google Cloud clearly in ascendancy. However, the upheaval being wrought across every industry by the AI Revolution certainly extends as well into tech industry, where the much-smaller Google Cloud was able to match mighty Microsoft Cloud dollar for dollar in new business for the three months ended June 30. This is not a fluke or a one-time quirk. Q1 over Q4, the incremental numbers were Microsoft Cloud $3.0 billion, Google Cloud $2.3 billion, and AWS $2.0 billion.
- Google Cloud and AWS accelerating…. Look at the growth arc or trajectories over the past year for Google Cloud and for AWS: in both cases, they’re accelerating as the companies get bigger and their innovative AI-plus-cloud solutions gain momentum.
| Q2 ’26 | Q1 | Q4 ’25 | Q3 | Q2 | |
|---|---|---|---|---|---|
| Google Cloud | |||||
| Growth rate | 82% | 63% | 48% | 34% | 32% |
| Revenue | $24.8B | $20B | $17.7B | $15.2B | $13.6B |
| MSFT Cloud | |||||
| Growth rate | 27% | 29% | 26% | 26% | 27% |
| Revenue | $59.3B | $54.5B | $51.5B | $49.1B | $46.7B |
| AWS | |||||
| Growth rate | 37% | 28% | 24% | 20.2% | 17.5% |
| Revenue | $42.2B | $37.6B | $35.6B | $33.0B | $30.9B |
- …while Microsoft flatlining. It’s a bit awkward to appear to be criticizing a company growing at 27% while carrying an annualized run rate of $240 billion. At the same time, the numbers don’t lie — and the numbers show that Microsoft’s growth arc has flatlined over the past several quarters while those of both Google Cloud and AWS have been rising. So it’s not a matter of relative size — instead, the proper perspective here is that in an extraordinarily massive new market, Microsoft Cloud’s growth has plateaued around 27% while those of Google Cloud and AWS are not only growing, but are rising sharply.
- And overall TAM is exploding. Look at the remarkable growth in incremental new revenue generated in Q1 versus that generated in Q2: Google Cloud more than doubled from $2.3 billion to $4.8 billion; AWS more than doubled from $2.0 billion to $4.6 billion; and Microsoft Cloud surged by 60% from $3.0 billion to $4.8 billion. While I’m tempted to say that that sort of unprecedented growth at this scale is simply not sustainable, I’m also fully aware that this market has repeatedly obliterated expectations based on historical norms.
Final Thought
I launched Cloud Wars almost 10 years ago, and in those early days the #1 company was — no question — AWS. A few years later, as I began to see the booming growth of Microsoft Cloud, I replaced AWS as #1 on the Top 10 — and the AWS community howled.
As Microsoft’s growth accelerated while AWS’s was declining, I asked more than once: Can any company possibly challenge Microsoft for the #1 spot?
And then along came the AI Revolution, adding significant momentum to the accelerating energy Google Cloud was generating in the cloud space and leading me in early January to dethrone Microsoft and install Google Cloud at the top of the list.
Since then, Google Cloud’s numbers for Q4, Q1, and now Q2 have fully validated my hunch, and I believe the analysis above will further illuminate who’s gaining valuable ground in the AI and Cloud Wars.
And to all three companies whose recent performances are pretty much unrivaled in the history of business: well done!
