Amazon and Microsoft are both experiencing accelerated cloud revenue growth, driven by high demand for AI computing. Amazon’s AWS alone generated $11.4 billion in operating income, with a 20% increase in revenue to $33.0 billion. Microsoft’s cloud revenue grew 26% to $49.1 billion, with a 40% increase in Azure revenue.

While both companies are investing heavily in AI-capable cloud computing, Amazon’s forward P/E ratio of 28 is slightly more attractive than Microsoft’s 31. This may give Amazon the edge as the better stock for 2026 and beyond, despite Microsoft’s faster overall business growth.

Investors should consider the risks of both stocks, particularly if the huge spending on AI computing doesn’t yield expected revenue and profits. However, with diversified businesses and excess capital for investments, both Amazon and Microsoft are positioned to benefit from the AI boom in the long run.

Read more at Nasdaq: Amazon vs. Microsoft: Which Stock Is a Better Buy for 2026 and Beyond?