From Nasdaq: 2024-11-18 00:11:58

1. Alphabet (NASDAQ: GOOG) is currently a better pick over Amazon stock (NASDAQ: AMZN) due to GOOG’s lower valuation at 22x forward earnings compared to AMZN’s 42x. GOOG has outperformed AMZN in the last three years, with stronger revenue growth and profitability, making it a promising investment.

2. GOOG stock has seen a 110% rise compared to AMZN’s 30% increase since early 2021. Google’s revenue growth has been better, with a 19.9% average annual rate compared to Amazon’s 14.3%. Google’s cloud business and search revenue have been key drivers, while Amazon’s strength lies in e-commerce and AWS.

3. Google’s operating margin has improved significantly from 22.6% in 2020 to 27.4% in 2023, surpassing Amazon’s margin increase from 5.9% to 6.4%. Google is more profitable, with an operating margin of 30.9% in the last twelve months, compared to Amazon’s 9.8%.

4. Google faces antitrust cases, potentially impacting its future growth. Amazon, on the other hand, is dealing with legal challenges, including a report of a probe from the CFPB. Investors need to consider these risks when evaluating the long-term prospects of both companies. In a lawsuit filed by the FTC and 18 states, Amazon is accused of inflating prices, overcharging sellers, and stifling competition. Facing regulatory hurdles in the U.S. and overseas, Amazon’s market dominance is under scrutiny. Google, with better revenue growth and profitability, is considered a better investment choice over Amazon, with potential for higher returns in the next three years. Amazon’s focus on AI and cloud offerings is seen as a positive step, but Google’s valuation multiple and growth prospects make it a more attractive option. Comparing returns, Google has outperformed Amazon and the S&P 500, with the Trefis Reinforced Value Portfolio yielding the highest returns since 2016. Investors are advised to consider the risks and potential outcomes of the antitrust case against Google in their investment decisions.



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