The artificial intelligence (AI) train shows no signs of slowing down. Spending on the category is expected to grow 5x over the next five years, according to a recent report from Grand View Research. That increased AI spending has been and will continue to be a boon for the cloud computing giants. That's because start-ups like OpenAI and Anthropic perform AI model training and run inference for consumer usage through cloud computing systems. And huge capital expenditures on data centers should help growth continue at this blistering pace in 2025.
But who are the cloud computing giants benefiting from this AI surge? Two of them happen to be well-known for other reasons and have a history of being millionaire-maker stocks. Here's why Alphabet (GOOG 2.49%) (GOOGL 2.30%) and Amazon (AMZN 3.95%) can continue to be millionaire-maker stocks going forward with the help of AI and the cloud.
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Amazon's cloud AI partnerships
Amazon is making investments on the consumer side of AI with its e-commerce platform, but the majority of its investments are with its cloud computing division, called Amazon Web Services (AWS). AWS is the premier partner for Anthropic, one of the leading start-ups in the AI space, where Amazon has invested billions of dollars. With these investments, Anthropic will pour money into training and running AI systems on AWS. A long-term partnership such as this will be vital for AWS. Anthropic may spend tens of billions of dollars on cloud computing credits in the years to come.
Revenue growth accelerated for AWS in recent quarters as companies flock to the cloud computing leader to host their AI systems. AWS revenue grew 17% year over year last quarter to $29.3 billion, bringing annualized revenue to $117 billion. Profits are soaring because of this spending, sending operating income to $42 billion over the last 12 months just for the AWS segment.
NASDAQ: AMZN
Key Data Points
Growth should continue in 2025 and beyond. Amazon said it plans to spend $100 billion on capital expenditures in 2025, mostly related to AI at AWS. This increased data center capacity will help revenue keep scaling at a rapid clip. Accompanied by strong profit margins, this will be a huge earnings growth driver for Amazon over the next few years.
Add in the durable growth in e-commerce, and Amazon stock looks like a perfect stock to own over the long term. It has a slightly expensive forward price-to-earnings ratio (P/E) of 35, but that should come down quickly with better margins at e-commerce and steady growth at AWS. Buy Amazon stock and sit tight; you likely will be well rewarded in the future.
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Winning in cloud and consumer for Alphabet
Alphabet may be an even more exciting AI winner than Amazon, as it is successfully navigating both the infrastructure (cloud) and consumer-facing AI disruption. Plus, the stock trades at a cheaper valuation.
Google Cloud is the fastest-growing cloud provider today, posting 28% year-over-year growth to $12.3 billion last quarter. It is smaller than AWS, but catching up quickly. Companies are utilizing Google Cloud because of Alphabet's superior infrastructure for training and running AI systems, which it has been building for years with its tensor processing units (TPUs). These computer chips are custom-built for AI services -- so much so that Alphabet rival OpenAI just signed a deal to put some of its workloads on Google Cloud.
NASDAQ: GOOGL
Key Data Points
Investors are worried that AI start-ups like OpenAI will kill Google Search. Alphabet has been adept so far in disrupting its own business to stay relevant with Gemini and AI overviews on Google. We do not have any hard data on how fast Gemini's revenue is growing, but we do know usage is growing at a blistering rate, which should correlate with revenue. On the company's latest conference call, Alphabet management said that active users in AI Studio and the Gemini API grew 200% since the beginning of 2025. That is tripling your user base in a quarter. Impressive stuff from the technology giant.
Alphabet stock trades at a cheaper forward P/E than Amazon, at 18.5. While it does have an intense competitive threat from OpenAI, Alphabet stock looks dirt cheap as a perennial growth stock that can take advantage of and lead the AI boom. Buy up both Amazon and Alphabet stock and watch your portfolio likely appreciate in value over the next 10 years.
