Alphabet vs Amazon Earnings: Who Turns AI Spend Into Revenue?
This week, $Alphabet(GOOG)$, with a market cap exceeding $4 trillion, and $Amazon.com(AMZN)$, currently streamlining its organization, will take center stage. This time, the market is looking beyond "Large Model" narratives to focus on real margins and ROI.
$Alphabet(GOOG)$: The "Harvest Season" of Full-Stack AI
Power of Gemini 3.0: BofA expects Search growth to rise to 15% (from 13%), driven by higher conversion rates from AI Search.
Cloud (GCP) Acceleration: With self-developed TPUs (70% unit cost reduction) and mega-deals like Anthropic, Cloud has become the fastest growth engine.
Apple Endorsement: The AI partnership with Apple is seen as a ultimate validation of its tech strength, though valuation concerns (higher than MSFT) remain.
$Amazon.com(AMZN)$: Beware the Lingering "Bullwhip Effect"
Inventory Alert: Q3 2025 inventory hit a record peak of $41.5 billion, up 21.28% YoY, far outstripping the 13% revenue growth.
Margins Peaking? Market expects Q4 net margin to pull back to 9.93% (from 11.7%), hit by inventory-driven promotions and logistics costs.
Organizational Slimming: Can the plan to cut 16,000 corporate roles offset inventory costs and sustain its premium valuation?
This Week’s Two Big Tech Reports — Google vs. Amazon, Who Beats?
Which one can hit a new all-time high?
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I think Google can close above $340, benefiting from its full-stack AI advantage.
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At the same time, GCP looks structurally stronger. Self-developed TPUs are lowering costs, while large deals like Anthropic support both scale and margins. The Apple AI partnership remains a strong validation of Google’s full-stack capabilities, even if valuation concerns linger.
By comparison, I’m more cautious on $Amazon.com(AMZN)$ in the near term. Elevated inventory and expected margin pullback still pose risks, despite organizational slimming. For this week, I think the market favors clearer ROI — I believe Google can close above $340, driven by its full-stack AI edge, and it has a better chance of setting a new all-time high.
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analysts predoction-Alphabet currently has a Zacks Rank #3 (Hold) due to its extensive recent rally, while Amazon holds a Zacks Rank #2 (Buy), suggesting analysts see more immediate upside potential for Amazon stock if it delivers a strong report.
Alphabet (GOOGL): Based on the most recent intraday data and pre-earnings volatility, Alphabet is expected to close near $344.16.
Amazon (AMZN): Amazon is projected to close around $239.61.
The market is witnessing a brutal show me moment for Big Tech. While Google's latest earnings delivered top line growth, it has been overshadowed by a massive looming figure : The 2026 Capital Expenditure.
Google's earnings report showed that it is benefiting from its long term AI integration. However the cost is substantial.
The Harvest: Google Cloud increased 48% as AI workloads grew. It also decreased Gemini's serving costs by 78%, showing that efficiency is improving as demand rises.
The Bill: Capex of USD 175 B to USD 185 billion , almost double its 2025 spending.
The reaction : The stock fell. Investors are concerned that Alphabet is spending too much in infrastructure.
Amazon is facing a similar problem to Alphabet - spending too much on Capex. It must show how it can monetise its capex.
@Tiger_comments @TigerStars @TigerClub
利润率见顶？市场预计，受库存驱动的促销和物流成本的打击，第四季度净利润率将回落至9.93%（从11.7%）。
雲(GCP)加速：憑藉自研TPU（單位成本降低70%）和像Anthropic這樣的大型交易，雲已經成爲增長最快的引擎。
蘋果背書：與蘋果的人工智能合作被視爲對其技術實力的最終驗證，儘管估值擔憂（高於MSFT）仍然存在。
Alphabet
Alphabet’s proof point is Search + Cloud. If Gemini features lift ad yield and engagement without compressing margins, and Google Cloud shows faster growth with improving operating margins, that is direct evidence AI is monetising at scale. Risk: high AI capex diluting margins if revenue lift lags.
Amazon
Amazon’s test is AWS. Clear signs that AI workloads are driving reacceleration in AWS growth and margin expansion would validate monetisation more cleanly. Enterprise contracts, higher attach rates, and operating leverage make AI revenue easier to attribute.
Verdict
• Cleaner AI monetisation signal: Amazon (AWS is a paid, usage-driven platform).
• Bigger strategic payoff if it lands: Alphabet (AI defending Search margins and scaling Cloud).
In short, Amazon offers clearer near-term proof; Alphabet offers higher upside if execution matches expectations.