Tech Stocks Hit Hard: Which is the Better Buy, Alphabet or Amazon?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy GOOGL?
Source: Fool
- Amazon Cloud Acceleration: In Q4 2025, Amazon reported a 14% year-over-year increase in net sales to $213.4 billion, with its cloud segment, Amazon Web Services, generating $35.6 billion in revenue, reflecting a 24% growth driven by strong demand for AI workloads, enhancing its competitive edge in the market.
- Alphabet Cloud Surge: Alphabet's consolidated revenue for Q4 2025 reached $113.8 billion, an 18% increase year-over-year, while its Google Cloud business saw a remarkable 48% revenue jump to $17.7 billion, with an annual run rate exceeding $70 billion, showcasing significant growth potential fueled by AI.
- Capital Expenditure Plans: Amazon anticipates capital expenditures of approximately $200 billion in 2026, while Alphabet expects between $175 billion and $185 billion, aimed at meeting surging customer demand, although such high spending introduces execution risks.
- Valuation Comparison: Alphabet trades at a price-to-earnings ratio of about 25, compared to Amazon's 28, making Alphabet more attractive for long-term investment due to its faster cloud growth and slightly lower valuation, despite both facing risks related to delayed returns from infrastructure investments.
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Analyst Views on GOOGL
Wall Street analysts forecast GOOGL stock price to rise
33 Analyst Rating
26 Buy
7 Hold
0 Sell
Strong Buy
Current: 297.390
Low
305.00
Averages
374.25
High
400.00
Current: 297.390
Low
305.00
Averages
374.25
High
400.00
About GOOGL
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Cloud Giants Performance: Alphabet and Microsoft are reaping significant returns from their cloud computing investments, with Azure and Google Cloud revenues increasing by 39% and 48% year-over-year, respectively, despite both companies' stock prices dropping over 20%, indicating their sustained market leadership.
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- Strengthened AI Competitiveness: Despite challenges, Alphabet has successfully transitioned, solidifying Google Search as a primary interface for AI interaction, with its generative AI platform, Gemini, emerging as a leading model in a competitive landscape.
- Cloud Computing Growth: Google Cloud's revenue surged 48% year-over-year in Q4, making it the fastest-growing among major cloud competitors, driven by its custom chips that enhance cost performance for AI applications, attracting numerous developers.
- Capital Expenditure Concerns: Alphabet plans to allocate $175 billion to $185 billion for data center construction by 2026, raising investor concerns about ROI; however, the company argues that engaging in AI technology is essential, potentially yielding long-term benefits.
See More
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