AI Hyperscalers: Amazon vs. Alphabet
Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOG, GOOGL) are key players in the artificial intelligence market, but are employing differing strategies. As of Q1, Amazon’s cloud computing service, AWS, generated $37.6 billion in revenue, contributing 59% of the company’s operating profit, despite only accounting for 21% of total sales. In contrast, Alphabet’s Google Cloud earned $20 billion, growing at 63% year-over-year but providing less profitability compared to its advertising revenue.
Alphabet outpaced Amazon in revenue growth, achieving a 22% increase compared to Amazon’s 17% in Q1. Forecasts suggest that Alphabet will continue this trend with a projected growth of 21% in 2026, while Amazon’s expected growth is 15%. Both companies are investing heavily in data centers, with no immediate financial returns expected. However, Alphabet’s faster growth and more attractive stock valuation makes it a better buy at the moment, despite Amazon’s long-term stability in e-commerce.
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