The artificial intelligence (AI) wave has triggered an all-out race for leadership among technology giants. Both Alphabet (GOOG 0.02%) (GOOGL 0.05%) and Amazon (AMZN 1.00%) are well positioned to emerge as winners in their respective AI niches.
However, the returns their investors see from here will depend heavily on how efficiently these companies can monetize AI demand.
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Alphabet's growth strategy
Alphabet has embedded its Gemini family of large language models across its core offerings, including in Google Search, Google Workspace, Android, and Google Cloud. Recently, the company entered into a multiyear agreement with Apple that will have the iPhone maker using Gemini models to enhance its revamped Siri virtual assistant, which is expected to launch in late 2026. The deal gives Alphabet access to Apple's installed base of over 2 billion active devices, while reducing its reliance on search-related revenues.
NASDAQ: GOOG
Key Data Points
At the same time, Google Cloud ended the third quarter of 2025 with a $155 billion backlog, highlighting multiyear revenue visibility. The company has signed a definitive agreement to acquire cloud security firm Wiz for $32 billion in cash. If regulators approve the deal, it will expand Alphabet's security portfolio.
Amazon's growth strategy
Amazon's growth story will rely heavily on expanding the scale and improving the profitability of Amazon Web Services (AWS). Its cloud platform segment had a backlog of nearly $200 billion at the end of the third quarter. AWS' revenue growth reaccelerated to 20.2% year over year in the quarter, its strongest pace in almost three years. The company has also entered into a $38 billion, seven-year deal to supply cloud capacity to OpenAI, further validating its AI capabilities.
NASDAQ: AMZN
Key Data Points
Amazon's advertising business has become another crucial growth engine, adding a high-margin revenue stream. The company is strengthening its competitive moat in retail through faster delivery and market expansion, thereby boosting purchase frequency and customer stickiness.
Both of these companies look like potentially appealing portfolio additions, but which stock is more suitable for you will depend heavily on your investment style and risk tolerance. If you want faster upside from AI-driven valuation expansion, then Alphabet stock seems like a better pick. However, if you'd prefer a company with more balanced growth from multiple profitable businesses, Amazon looks like it would be a better choice.
