The Motley Foolยท2025-05-28 08:04Group 1: Amazon - Amazon reported a 9% increase in revenue to $155 billion and a 62% jump in GAAP earnings to $1.59 per diluted share in the first quarter [3] - The company expects second-quarter operating income to be between $13 billion and $17.5 billion, indicating potential growth between negative 11% to positive 19% due to tariff uncertainties [3] - E-commerce sales are projected to grow at 11% annually, digital ad spending at 15%, and cloud computing sales at 20%, positioning Amazon for double-digit revenue growth through the end of the decade [4] - Amazon is developing around 1,000 generative AI applications to enhance efficiency in various areas, which is expected to improve profitability [5] - To achieve a $3 trillion market value by late 2026, Amazon's stock price must increase by 41% to $283, given its current price of $201 and market cap of $2.13 trillion [6] - Even with a slowdown to 26% annual earnings growth, Amazon can still reach a $3 trillion market value without changes in the P/E ratio, assuming tariffs do not pose significant challenges [7] Group 2: Alphabet - Alphabet's first-quarter revenue increased by 12% to $90 billion, with GAAP earnings rising 49% to $2.81 per diluted share, driven by strong cloud services sales [8] - Digital ad spending is expected to grow at 15% annually and cloud computing sales at 20%, allowing Alphabet to maintain double-digit sales growth through the end of the decade [9] - Despite losing market share in digital advertising, Google Search and YouTube remain highly engaging platforms, supporting plausible double-digit growth [10] - Alphabet's Waymo subsidiary is a leader in the autonomous driving market, with plans to expand robotaxi services, which could create significant shareholder value in the long term [11] - Alphabet can achieve a $3 trillion valuation if earnings grow at 30% annually over the next six quarters, with a current valuation of 18.7 times sales being reasonable given recent earnings growth [12]