Alphabet vs. Amazon: Both AI Stocks Have Been Hammered, but One Looks Like a Better Buy Now

By Daniel Sparks – Mar 30, 2026 at 9:17PM ESTKey PointsAmazon's cloud computing segment delivered impressive 24% year-over-year revenue growth in the fourth quarter of 2025.Alphabet's cloud business is expanding at an even faster clip, with fourth-quarter revenue surging 48% year over year.Despite both companies forecasting enormous capital expenditures for 2026, Alphabet pairs this big budget with its superior cloud growth and a slightly more attractive valuation.Tech stocks have been slammed in 2026, with recent trading days compounding the pain for investors. Even industry leaders like Alphabet (GOOG 0.20%)(GOOGL 0.31%) and Amazon (AMZN +0.81%) have seen their shares take a hit. As of this writing, the two stocks are both down about 13% year to date. With both tech companies investing aggressively in artificial intelligence (AI) infrastructure, the recent sell-off makes them look like tempting opportunities. But which of these two tech heavyweights is the better place to deploy capital right now? Let's look at the underlying business fundamentals to find out. Image source: The Motley Fool. Amazon's cloud reacceleration Amazon is firing on all cylinders, particularly in cloud computing. In the fourth quarter of 2025, the e-commerce giant reported a 14% year-over-year increase in net sales to $213.4 billion. But its cloud computing business, Amazon Web Services, is seeing meaningfully faster growth than its consolidated business. This crucial segment generated $35.6 billion in revenue during the period, representing a 24% year-over-year growth rate. That is a notable acceleration from the 20% growth Amazon Web Services reported in the third quarter of 2025. Management specifically pointed to customer demand for AI workloads as a major driver of this momentum. ExpandNASDAQ: AMZNAmazonToday's Change(0.81%) $1.61Current Price$200.95Key Data PointsMarket Cap$2.1TDay's Range$199.98 - $203.8052wk Range$161.38 - $258.60Volume46MAvg Vol50MGross Margin50.29% But achieving growth like this requires significant investment. Amazon expects to outlay approximately $200 billion in capital expenditures in 2026. While the company anticipates strong long-term returns on this capital, spending at that scale leaves little room for execution missteps. Alphabet's blazing cloud expansion Alphabet's recent performance is arguably even more impressive. The search giant posted consolidated revenue of $113.8 billion for the fourth quarter of 2025 -- up 18% from the year-ago period. Like Amazon, Alphabet is seeing outsize benefits from the artificial intelligence boom -- but even more so.

Its Google Cloud business saw revenue jump an incredible 48% year over year to $17.7 billion in the fourth quarter. This cloud computing segment is now operating at an annual run rate exceeding $70 billion. And Alphabet's core Google Services business remains highly lucrative, with search and other revenue growing 17% year over year in Q4. Also similar to Amazon, Alphabet is forecasting substantial spending this year. The company anticipates its 2026 capital expenditures will land between $175 billion and $185 billion as it builds out capacity to meet surging customer demand. Is Alphabet or Amazon stock a better buy right now? Both companies are spending huge sums of money to capture the AI opportunity, but Alphabet seems to be getting a more immediate payoff in its cloud division. When comparing the two, Alphabet's 48% cloud growth rate handily beats Amazon's 24% pace. Further, AI seems more complementary to Alphabet's entire ecosystem, enhancing everything from search results to YouTube recommendations in a material way. Indeed, Alphabet CEO Sundar Pichai noted in the company's fourth-quarter update that AI is driving "an expansionary moment" in its core search business. ExpandNASDAQ: GOOGLAlphabetToday's Change(-0.31%) $-0.84Current Price$273.50Key Data PointsMarket Cap$3.3TDay's Range$272.11 - $277.0952wk Range$140.53 - $349.00Volume35MAvg Vol33MGross Margin59.68%Dividend Yield0.31% Then there is the valuation. Alphabet trades at a price-to-earnings ratio of about 25. Amazon, meanwhile, carries a slightly higher price-to-earnings ratio of around 28. Choosing between these two tech giants is tough, as they both look attractive after their recent pullback. But if I had to choose one, I believe Alphabet is the better buy today. The search company offers both much faster cloud growth and a slightly cheaper valuation, giving investors a better setup for the long haul. Of course, there are risks with both stocks. For instance, if the payoff from their respective infrastructure build-outs takes longer than anticipated, both companies could see their profit margins pressured. Still, given its exceptional cloud momentum and lower valuation multiple, I think Alphabet is a compelling investment here.Read NextMar 30, 2026 •By Danny Vena, CPAGoogle Just Announced Really Bad News for Micron and SandiskMar 30, 2026 •By Geoffrey SeilerGot $5,000? 1 Artificial Intelligence (AI) Stock to Buy and Hold for the Long TermMar 30, 2026 •By Jack CaporalThe fastest-growing energy sources in the U.S. – and what it means for individual investorsMar 30, 2026 •By Jack CaporalThe AI Stocks Hedge Funds Love the MostMar 29, 2026 •By Geoffrey SeilerAlphabet Just Introduced Its Newest AI Advantage, and It's Another Reason to Buy the StockMar 29, 2026 •By Will HealyGot $5,000? 2 Stocks the Fed's Rate Decision Just Made More AttractiveAbout the AuthorDaniel Sparks is a contributing Motley Fool stock market analyst covering technology, industrials, financials, and consumer goods. Daniel is the owner and chief investment officer of Sparks Capital Management. He holds a master’s degree in business administration from Colorado State University. The Globe and Mail profiled him and his investing philosophy in an article titled, “This stock picker is outperforming nearly everybody else. Here’s how he is doing it.”TMFDanielSparksX@sparks_capitalStocks MentionedAlphabetNASDAQ: GOOGL$273.51(-0.30%)-$0.83AmazonNASDAQ: AMZN$200.95(+0.81%)+$1.61AlphabetNASDAQ: GOOG$273.22(-0.20%)-$0.54*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.