Which Tech Stock Is the Better Buy Right Now?

When choosing between two tech giants such as Amazon.com, Inc. and Alphabet Inc. as the best stock to buy now, the differences in strategy and valuation come sharply into focus. Amazon reported second-quarter 2025 revenue of approximately 7.7 billion, up 13% year-over-year. Alphabet meanwhile posted revenue of about .3 billion in the same period, up 12% year-over-year.

Both companies sit at the centre of the cloud, advertising and consumer-internet shifts. Yet they operate under very different margin profiles, investment burdens and market expectations. 

Company Growth Engines

Amazon’s core remains e-commerce but its growth trajectory increasingly depends on high-margin businesses. Its cloud division, Amazon Web Services (AWS), generated about .9 billion in quarterly revenue, growing ~17.5 % year-over-year. Though AWS accounts for under 20% of Amazon’s top line, it drives more than half of operating profit.

The company is also scaling rapidly in advertising, where its ad revenue rose ~22% year-over-year in Q2. Meanwhile, Amazon continues heavy investment in logistics, data centres and AI-infrastructure, its capex is guided above 0 billion for 2025. These moves indicate Amazon aims to convert its vast retail reach into a broader platform business spanning cloud, advertising, and ecosystem ubiquity.

Alphabet meanwhile anchors its business in advertising – search, YouTube, and Google Ads remain its primary cash engines. In Q2 it posted Search and Other revenues up about 12 % to .19 billion. At the same time its cloud arm, Google Cloud, grew 32 % year-over-year to .8 billion in Q2, though from a smaller base.

Alphabet is deploying its AI assets such as the Gemini model and integrating AI into core services like Search and Chrome, and a recent firm note raised its price target to 0 citing browser-AI integration. The strategy here is less about re-building scale and more about monetising an existing massive user base while maintaining dominance in digital advertising.

In short, Amazon is doubling down on reinvesting to build multiple engines of growth, whereas Alphabet leverages a mature platform to monetise at higher margins. The choice for investors comes down to: do you favour Amazon’s heavier investment tilt and potential upside, or Alphabet’s established cash generation and margin control?

Valuation & Risk

On returns, Amazon offers higher potential upside if it successfully scales AWS, advertising and logistics. For example a recent note suggested Amazon could double in five years if margins improve and cloud growth returns. Conversely, Alphabet offers a more conservative risk-return profile. Analysts from Citizens JMP reaffirmed a “Market Outperform” rating for Alphabet, citing stable ad revenue growth and strong AI integration. Alphabet’s price target upgrade to 5 reflects that confidence.

Risk-wise, Amazon faces margin pressure from its retail business, heavy capex commitments and fierce competition in cloud and AI infrastructure. Its ability to hit high-growth targets in AWS is under scrutiny; some analysts question whether AWS can reach the ~20% growth threshold required to justify Amazon’s valuation.

Alphabet’s key risks include regulatory and antitrust pressure, its dominant search business remains under scrutiny, and the uncertainty of how quickly AI monetisation will bear results. On the macro and valuation front, some analysts have warned that mega-cap tech valuations may be stretched.

What Could Go Wrong & What Could Work

Both companies face distinct sets of risks and potential upsides. For Amazon.com, Inc., one notable risk is its cloud business, Amazon Web Services (AWS), slowing further. AWS grew ~17.5% year-over-year in Q2 2025, yet analysts argue it must hit ~20% growth to support Amazon’s valuation.

Heavy capital expenditure also burdens cash‐flow, with Amazon spending upward of billion in a recent quarter to expand infrastructure. On the upside, if AWS growth accelerates and Amazon’s advertising and logistics investments pay off, there is meaningful leverage for the stock to revisit stronger gains.

For Alphabet Inc., the key risk is its core search business. Some data suggests that search volume may be under pressure from emerging AI alternatives. Although Alphabet invests heavily in its cloud and AI platforms (projected ~ billion in 2025) the uncertainty lies in how fast these investments will translate into profit.

On the positive side, Alphabet’s entrenched advertising business and expanding cloud footprint provide a strong foundation; the market may underestimate its ability to monetise AI effectively.

Conclusion

In comparing Amazon and Alphabet, both companies are deeply embedded in the major trends shaping technology today: cloud, AI, advertising, but each faces different trade-offs. Amazon is choosing a bold growth pathway, reinvesting heavily and relying on AWS, advertising and logistics expansion to drive future returns.

That strategy offers higher upside but also higher risk. Alphabet, by contrast, operates from a stronger cash-flow base, leverages its existing dominance in search and ads and is gradually building its cloud and AI businesses. It appears more conservative.
 
Ultimately neither pick guarantees success; ongoing monitoring of key metrics, AWS growth, cloud scale, ad revenue trends, regulatory developments, is essential. This analysis is not personal investment advice. Each investor should align any decision with their financial situation, portfolio diversification and investment timeframe.