Which Tech Giant Will Outperform in 2025?

Alibaba and Amazon are the two names that every investor is talking about in the fast-paced growth investing industry. These two giants emerge victorious in e-commerce, cloud computing and synthetic intelligence world, and are believed to possess phenomenal prospects in the future. However, even as the scenery is shifting fast in 2025, the issue to the heaviest investors at this point is which of their stocks will outperform better today? Is Amazon dictating the largest market or the Alibaba recovery out of the lockdown via a cloud economy landing in a positional Chinese economic tightening environment? 

The operating secret of Amazon: Scale, profitability and innovation

Amazon, the Cloud infrastructure development or global e-commerce innovation has long been synonymous with the two leading e-commerce brands in the country, Amazon and Alibaba. Amazon’s Global North America and other Global Stores (four times larger than the rest of the world) posted total revenues of $167.7 billion in Q2 2025 (+13% YoY) and its net income rose by an incredible 35, to $18.2 billion. 

By contrast, Alibaba, a Chinese cloud computing giant and the market leader, has recorded almost 2% increase in revenues over the past quarter, driven by a healthy 31% year-over-year (y-o-y) growth in revenues of its cloud computing enterprise.

Amazon Web Services (AWS) has achieved an annualized revenue run rate of more than $123 billion, CEO Andy Jassy revealed in the company’s Q2 2025 earnings call. The cloud unit saw a revenue of $30.9bn for the quarter, up 17.5% year-over-year (YoY) and more than the previous quarter’s $29.3bn. However, while this positions AWS in the lead against competitors Microsoft and Google in terms of revenue, with the companies reporting $29.9bn and $13.6bn respectively, investors were quick to note that AWS’ revenue growth rate was significantly lower.

In this sense, Amazon performance in 2025 becomes the product of multiple growth vectors interacting to generate a profit-generating organic nucleus of growth. On top of the healthier year-over-year top-line growth of 11% in its online store business, the Amazon advert business expanded 22% annually, and still takes advantage of the truly huge number of users that the company has. AWS continues to drive increasing revenue and operating income and stands better in Q2 2025 after investing heavily in AI hardware and data centers, with an operating margin of 32.9%. 

Amazon CEO Andy Jassy mentioned the triple-digit growth propelled by AI, as well as the introduction of new AI-powered services like Alexa+, a new subscription tier to capitalize on AI functionality. The company continues to solidify the moat around its competitive advantage as it continues to roll out AI in more than 1,000 applications and continues to improve operations and experiences of its clients.

Amazon shares commute to approximately 35x forward incomes which suggests they believe they have constructed a consistent enterprise that can create cash flow to reinvest and is consistent irrespective of economic cycles. The PE ratio for Amazon Com stock stands at 35.23 as of Sep 4, 2025. This is calculated based on the TTM EPS of $6.69 and the stock price of $235.68 per share. The current PE ratio is about the same compared to the last 4 quarters average.

Lesson of Alibaba: How to become big in a complicated world

The 2025 Global growth story of Alibaba is far more complicated. Although the overall revenues have increased by 2% YoY, the demand of AI products in the cloud intelligence segment helped the company to offset the revenues lost as a result of this recent divestiture, and as a result the company experienced 26%-point growth in revenues in this segment without consideration of the revenues lost as a result of this recent divestiture to total revenues 10% YoY. 

The initiatives add muscle to grandiose plans to infuse RMB 380 billion in AI infrastructure over the next three years that will assist Alibaba reduce its dependence on US suppliers with over RMB 38.7 billion investments, nearly $5.3 billion in the previous quarter alone. Placing Alibaba-one of the most competitive companies in China in the long run within a large but wild internet market.

Moreover, with subsistence, Alibaba does not stop being in a hyper-competitive business environment that exerts downward force on the business, and as a consequence, it is a fine balancing act between aggressively expanding the business and at the same time making profit.

The other prime difference is that Amazon still holds a lead in Cloud infrastructure globally. AWS possesses nearly 30% of the cloud space and Alibaba Cloud only 4% of the data center share. Alibaba has become the fourth largest cloud provider in the world, but the scale and extent of the Alibaba cloud is trivial, in comparison with the US market giants Amazon, Microsoft Azure and Google Cloud.

Valuation & Investor Ratings

Meanwhile, institutional constraints and decelerating discretionary spending growth in China, where Amazon is pacing both direct retail and advertising monetization (as is Alibaba), limit the convergence in the context of e-commerce. However, there is indeed in place well-established strategic partnerships and in-house AI solutions that Alibaba can tap into, which are likely to initiate transformation of the e-commerce ecosystem in case China continues growing its economy at an accelerated pace.

Since it is able to generate high cash flows and a stream of reinvestment opportunities, it ought to be well placed to keep on innovating and competing in the process.

To add another dimension to the different risk/reward profiles, providing valuation snapshots. This confidence in quality, size and profitable expansion is manifested in higher forward P/E (~35) in Amazon. Nevertheless, the relatively low multiple (~15 P/E) price value represents market risk less than geopolitical uncertainty, legal enforcement and possibly insecure earnings outlook common to Alibaba model of operation.

Notably though, the immediate potential of Amazon (and reciprocally the mutually-effective synergies of Retail, Advertising and Cloud) looks promising, Alibaba has been feverishly returning capital through buybacks and dividends and delivering a sort of income-lift in unsure growth times.

Amazon is a great stock to the growth and operation efficiency stock investor. The contrarian investors, or any other person, ready to use the rising stock growth in case of the cloud development, or the recovery of the mean value, suspected of the improving Chinese macro-economic situation, can be interested in the stock because of higher risk of execution.

Future Outlook

In the meantime, we think that Amazon has a rather bright future due to vertical synergies between retail, advertising and cloud. In these circumstances, the introduction of artificial intelligence, at least theoretically, is able to serve all of them: an increase in the scale of its operations, the changing tastes and preferences of consumers, and, on an at least slightly different plane, even the very character of the product. 

In fact, together with the AWS momentum in the AI infrastructure category and the increase in high- to high-margin ad revenue, this business has become a potent growth engine that is large enough to endure economic cycles.

Betting big on AI and cloud computing is essential to the future of Alibaba and the company spends heavily on both to create growth which can be recaptured at scale. Bullish: Upside: Alibaba happens to be a huge company should China manage to re-establish stability in its economy as well as should the bank level allocation to digitization of businesses grow as fast as it has been growing in China. But the ability to increase margin and to produce positive free cash flow despite the presence of strong competition is paramount to Alibaba should it be interested in maintaining a higher valuation.

As Amazon’s position in the market and earnings projections have turned the stock into one of the comparatively secure bets in a dynamic growth industry, most recent outcomes about Alibaba depict the Chinese giant will have to scan somewhat further at geographic growth, AI innovation and cost disciplining.