The first six months of 2022 have been marked by wild volatility and market-moving news events, such as Russia's invasion of Ukraine and the Federal Reserve's largest rate hike in more than a quarter-century. Yet amid this steady diet of news, investors have become ever more fascinated with companies announcing stock splits.

A stock split is a way for a publicly traded company to alter its share price and outstanding share count without affecting its market cap or operating performance. Enacting a forward stock split is a way companies can make their shares more nominally affordable for retail investors who might not have access to fractional-share investing.

Paper stock certificate reading Shares.

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More importantly, stock splits are viewed as a positive sign by Wall Street and investors. A company's share price wouldn't be high enough to merit a split if it wasn't executing well and outperforming its competition.

Earlier this year, FAANG stocks Amazon (AMZN 0.58%) and Alphabet (GOOGL 1.08%) (GOOG 1.06%) both announced their intent to split their shares 20-for-1. Amazon's stock split has already taken effect (as of June 6), while Alphabet will split its shares on July 15.

The big question is: Which stock-split stock is the better buy right now?

The case to add Amazon to your shopping cart

With the Nasdaq Composite losing up to 34% of its value since hitting its mid-November closing high, Amazon has become quite an attractive deal for a variety of reasons.

For starters, Amazon is in rarified air within the retail landscape. According to a report issued by eMarketer in March, Amazon is expected to account for 39.5% of U.S. online retail sales in 2022. For context, Nos. 2 through 15 in online retail market share are expected to combine for 31% of all domestic retail spending this year. Amazon has a greater than eight-percentage-point share lead over its 14 closest competitors on a combined basis.

While it's easy to be enamored with the company's dominant online retail market share, what's far more important is that its leading e-commerce marketplace is driving consumers to purchase Prime subscriptions. As of April 2021, Amazon had more than 200 million global Prime subscribers. The annual fees collected from Prime members are what gives the company the freedom to invest in its logistics network and undercut other retailers on price.

Yet the interesting thing about Amazon is that its online marketplace doesn't matter all that much to its long-term profitability and operating cash flow. Although its online marketplace accounts for the lion's share of its sales, its cloud segment, subscription services, and advertising are far more important. This is a crucial point, because it means Amazon's retail segment could struggle, yet cash flow and profits can still head significantly higher.

Amazon Web Services (AWS), the company's cloud services segment, is the world's leading cloud infrastructure provider. According to a report from Canalys, AWS brought in an estimated one-third of global cloud infrastructure spending in the first quarter.  Because the operating margins for cloud services are many multiples higher than those associated with its online marketplace, Amazon has the potential to nearly triple its operating cash flow over the next five years.

The case to end your search with Alphabet

In the other corner is Alphabet, the parent company of internet search engine Google and streaming platform YouTube. Like Amazon, Alphabet has become an incredible deal as the Nasdaq has plunged.

Alphabet's foundational operating segment is search engine Google. If you thought Amazon's market share lead in online retail was impressive, you might as well crown Google as a monopoly. Over the trailing-24-month period, ending in May 2022, Google accounted for between 91% and 93% of global internet search share, according to data from GlobalStats. With such a dominant position in global search, Google commands excellent ad-pricing power.

Google can thrive in almost any economic environment. With the exception of the initial stages of the COVID-19 pandemic, ad revenue for Google has consistently grown by a double-digit percentage for more than two decades.

However, Google may not be Alphabet's leading operating cash flow driver for much longer. Rather, one of Alphabet's other sales channels could claim that title. For instance, YouTube is the second most-visited social media website on the planet, with 2.56 billion monthly active users. YouTube's rapid ascent has put it on track to generate nearly $28 billion in annual run-rate ad revenue. 

There's also Google Cloud, which is the world's No. 3 cloud infrastructure provider. Google Cloud has been growing sales faster than AWS, although it only controls 8% of cloud service spending, compared to AWS at 33%. 

Considering the juicy margins that cloud infrastructure services bring to the table, Google Cloud could play a big role in potentially doubling Alphabet's operating cash flow by mid-decade.

Hand holding puzzle piece with a large question mark on it.

Image source: Getty Images.

The better stock-split FAANG stock to buy now is...

Now that we've taken a closer look at these highly profitable industry titans, let's return to the question at hand: Which stock-split stock is the better buy right now, Amazon or Alphabet?

Before I offer my view, note that whichever of these stocks delivers the lesser return, shareholders aren't likely to complain. Both Amazon and Alphabet have bright futures, and investors with a long-term mindset can grow their wealth with either company.

With that being said, Alphabet is the more attractive stock-split stock to buy right now. The reason is simple: Market dynamics.

When bear markets occur, it's common for valuation multiples to compress and for Wall Street to seek the safety of low-valuation stocks. Although Amazon's share price has declined by 43% since hitting its all-time high, it's still valued at 138 times forecast earnings this year and roughly 16 times Wall Street's operating cash flow projection.

Meanwhile, Alphabet is valued at 14 times estimated operating cash flow in 2022 and an extremely reasonable multiple of 20 times Wall Street's consensus earnings. These figures push even lower if you exclude Alphabet's nearly $134 billion in cash, cash equivalents, and marketable securities. With similar sales growth prospects for both companies, Alphabet's price-to-earnings-growth ratio is far more attractive than Amazon's, which makes it the better buy.