Amazon (AMZN) commands a persistent premium valuation from the broader market, trading at roughly 32x based on its current market price and TTM EPS. That is great for Amazon. But wait a minute, Alphabet (GOOG) currently sits at a noticeably more attractive 29x multiple. Hard to believe, but the market prices Amazon at a persistent premium to Google. This, despite the fact that Google’s top-line revenue growth for the first quarter of 2026 stood at 22% compared to just 17% for Amazon, a growth premium that holds up over the long term, with Google’s three-year average revenue growth pacing at 14.1% versus 12.3% for Amazon. Does that make sense? We don’t think it does, and believe Google stock presents a compelling valuation at current levels. See how Google’s financials compare to its peers, including Microsoft (MSFT) and Meta Platforms (META).
Sure, Amazon generated massive net sales of $181.5 billion in the first quarter to lead on absolute scale, but because that heavy retail baseline typically acts as a drag on percentage growth, Amazon’s massive footprint makes the market’s valuation discount on Google’s faster-growing stock even harder to explain. Furthermore, Google’s LTM operating margins are healthy at an impressive 32.7% versus a much lower 11.5% for Amazon. Google is simply generating more profit for every dollar it brings in.
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How Do The Core Businesses For Amazon And Alphabet Compare?
Let’s look at the core business prospects a bit more closely. Amazon still has massive traditional retail exposure, with its North American and International segments driving the vast majority of its business, bringing in over $143.9 billion in its most recent quarter. This leaves it highly vulnerable if broader consumer discretionary spending were to decline, especially given its relatively low 8% North American operating margin.
On the flip side, businesses of all stripes are heavily focused on operational efficiency and artificial intelligence integration right now. While this macro tide lifts all major hyperscalers, Google’s enterprise cloud services are converting this momentum into outsized gains. In its latest quarter, Alphabet’s Google Cloud segment posted $20.03 billion in revenue, driven by an explosive 63% year-over-year growth rate that outpaces the broader market’s realization.
Scaling The Enterprise Cloud And AI Architecture
In addition, while Amazon looks formidable with AWS pulling in $37.6 billion in the latest quarter alongside a strong 28% growth rate, Google appears highly resilient with its heavy focus on generative AI models and highly profitable digital advertising. Google’s Search and Other segment alone generated $60.4 billion last quarter, bolstered by rapid AI adoption that pushed the Google Cloud backlog past the $460 billion mark for the first time ever.
This enterprise shift is not isolated to these two players. Tech giants are aggressively fighting for the same secular cloud workloads. If you are assessing the entire landscape for your portfolio, you should also see our deep dive on Buy Or Sell Microsoft Stock to see how its ecosystem stacks up.
In fact, with an expanding presence across enterprise cloud workloads and massive structural AI integrations through its Gemini application interfaces, Google is gaining significant market share and scaling at a decidedly faster pace. We believe that while Amazon’s offerings make significant money, Google’s deeply entrenched digital dominance and vastly superior operating margins provide strong fundamental support for our belief that Google is undervalued versus Amazon.
