Amazon vs. Alphabet: Which Stock is the Better Buy Right Now

Key Points

• Amazon's e-commerce keeps growing. Its cloud division? Hugely profitable.
• Alphabet still dominates search globally, AI threats notwithstanding.

A closer look at Amazon

Amazon stands tall. World's largest e-commerce company. Second only to Walmart in retail. Their distribution network? Game-changing. They deliver anything next-day, right to your doorstep.

Q2 2025 sales were eye-popping. North America hit $118 billion, up 9%. International markets reached $42.3 billion, growing 12%. Pretty impressive. Yet they spent around $147 billion making those sales happen. The result? About $13.3 billion in operating income from e-commerce.

Funny thing, though. Investors aren't really here for the shopping. It's all about cloud computing. As AI takes off, Amazon Web Services (AWS) still leads the pack with 31% market share in Q2 2025. Microsoft Azure trails at 22%. Google Cloud sits at 15%. The numbers don't lie.

Cloud computing? Booming. The market hit $126 billion in Q2, up 17% from last year. AWS pulled in $37.4 billion, growing 15%.

The margins are kind of amazing. Think about it. Amazon's massive retail empire made $13.3 billion in operating income. AWS? It generated $12.8 billion in profits from a much smaller operation. No wonder AWS drives Amazon's growth.

A closer look at Alphabet

Different animal entirely. Alphabet lives on advertising. Google Search owns roughly 91% of global market share. People worried AI chatbots would hurt them. Didn't happen.

Google got smarter. Their AI-enhanced search seems to be working. AI Overviews now reach over 3 billion users monthly across 220 countries. Search revenue jumped 10% year-over-year to $61.5 billion in Q2. Google Services overall? $94.2 billion, up 8%.

Their ad network remains a beast. They caught a break in late 2024. The antitrust case ended with Google just sharing search data with competitors. No need to sell off Chrome or Android. The stock loved it. Been on a tear in 2025.

Which stock is the better buy?

Amazon's had a bumpy 2025. Economic worries. Only up 6% year-to-date. Not great.

Alphabet? Different story. One of the stronger Magnificent Seven performers. Up 24% in 2025 so far. Legal victory helped. Consistent results too.

Both seem like solid investments. But when choosing? Look at the numbers. Alphabet's price-to-earnings and price-to-sales ratios look much better than Amazon's. Alphabet trades at a forward P/E of 23. That's basically the same as the S&P 500.

A Magnificent Seven stock at regular market valuation? Feels like the better deal right now. Alphabet wins this round.