Tech Giants on Wall Street
Amazon’s e-commerce platform keeps expanding, while its cloud computing sector remains highly profitable.
Meanwhile, Alphabet maintains a strong grip on the global market for internet searches.
Recently, Wall Street has highlighted some of the most influential tech companies. Analyst Michael Hartnett from Bank of America has dubbed them the “Magnificent Seven,” showcasing seven of the top technology stocks available.
Among these are Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOG). Both companies boast market capitalizations exceeding $2 trillion and are key players in their industries, often categorized as prominent growth stocks.
But which one is the better investment right now? It’s a tough call, considering some have skyrocketed.
Amazon is widely recognized as the largest e-commerce entity globally, having disrupted traditional retail by building a robust distribution network that delivers a variety of products directly to customers’ homes.
In the second quarter, Amazon recorded $100 billion in sales in North America—an 11% increase from last year—and an additional $36.7 billion internationally, which reflects a 16% growth. Numbers like these are impressive, but it’s also noteworthy that Amazon invested $127.8 billion to achieve this. Ultimately, the e-commerce division only netted $9 billion in operating profit for the quarter.
However, the excitement around Amazon isn’t solely about retail. For context, Walmart achieved $675.5 billion in global retail sales in 2024, far surpassing Amazon’s $391.4 billion. Yet, Walmart’s market cap sits at around $773 billion, while Amazon ranks as the fifth-largest company in the world.
Investors find Amazon appealing mainly for its robust cloud computing segment. As more businesses look to scalable artificial intelligence solutions, Amazon Web Services (AWS) leads the charge in cloud computing, accounting for about 30% of the market. In comparison, Microsoft’s Azure holds 20%, while Google Cloud captures 13%.
The cloud computing industry continues to thrive, reaching a value of $99 billion in the second quarter, marking a 20% increase year-over-year. Amazon generated $30.87 billion in revenue from AWS during this period, seeing a 17.5% uptick from the previous year. This is key, especially considering that while Amazon’s e-commerce arm earned $9 billion, AWS brought in a net profit of $10.16 billion, positioning itself as a critical component of Amazon’s future.
On the flip side, Alphabet primarily focuses on advertising, with its popular search engine capturing nearly 90% of the global market share. This stands strong, even with rising competition from AI-driven platforms like ChatGPT.
In fact, Google’s AI-enhanced search capabilities may fortify its position. Alphabet’s AI overview garners over 2 billion users monthly, spanning across 200 countries. In the second quarter, Google’s search revenue climbed by 12% year-over-year to reach $541.9 billion, contributing to a total Google Services revenue of $82.5 billion, also a 12% increase from the previous year.
Alphabet’s ad network is a significant player—so much so that the Department of Justice has scrutinized it for potentially holding an illegal monopoly in online search and digital advertising. The government suggested that Alphabet divest some of its business segments, including Chrome and Android. A federal judge recently dismissed these proposals, instead instructing Alphabet to share its search data with competitors, which led to an 8% spike in its stock value the following day.
This year hasn’t been smooth sailing for Amazon, facing various challenges, but Alphabet continues to excel. It has shown growth of over 21% in 2025, bolstered by strong earnings in the second quarter and rising investor confidence.
Both companies would make solid additions to any investment portfolio. Yet, if you had to choose, the financial metrics tell an intriguing story. Alphabet has superior price-to-earnings and price-to-sales ratios when compared to Amazon. Furthermore, Alphabet trades at valuations closer to the S&P 500’s forward P/E of 23.
In light of everything, the chance to invest in these top-performing stocks should not be overlooked. Alphabet stands out as a particularly appealing option at this moment.
I think it’s good to consider your choices before diving into Amazon’s stock.
Interestingly, the Motley Fool’s analysts have pinpointed some top stocks for investors, and Amazon doesn’t make the cut. The ten highlighted stocks could yield remarkable returns in the coming years.
For instance, if you had invested $1,000 in Netflix back when it was recommended, that would now be worth a hefty sum—over $654,000! Or with Nvidia, the numbers are equally staggering.
With the total average return rate for the Motley Fool’s Stock Advisor reportedly sitting at 1,042%, far surpassing the S&P 500’s 183%, it might be wise to keep an eye on these options.
