Amazon (NASDAQ: AMZN) and Alibaba (NYSE: BABA) are both leveraging artificial intelligence (AI) to enhance their cloud computing and e-commerce operations. Alibaba’s e-commerce revenue rose 9% year-over-year, while its cloud revenue increased by 18% in the last quarter. Amazon’s AWS revenue jumped 17% to $29.3 billion, driven largely by AI-related solutions.
Alibaba’s initiatives include the monetization of higher gross merchandise volume through its AI-powered marketing tool, Quanzhantui. Its adjusted earnings before interest, taxes, and amortization (EBITA) for cloud computing surged by 69%. Meanwhile, Amazon is developing custom AI chips and implementing AI across its logistics and warehousing to optimize performance. Amazon’s North American revenue grew 8%, with operating income increasing by 16%.
From a valuation perspective, Alibaba trades at around 12 times forward earnings, whereas Amazon’s forward P/E stands at 34.5 times. Analysts suggest that Alibaba may offer higher potential upside, while Amazon is viewed as a safer investment. Both companies are top players in their sectors, but investors face different risk-reward profiles with each stock.
