The Motley Fool·2026-02-16 11:50Core Viewpoint - Amazon and Alphabet are experiencing significant growth in cloud computing, driven by their investments in artificial intelligence (AI) [1][4]. Company Performance - Amazon Web Services (AWS) reported a revenue growth of 24% in Q4, marking the fastest growth in 13 quarters, indicating an increase in generative AI workloads [5]. - Google Cloud experienced a remarkable revenue growth of 48% year over year in Q4, following a 34% growth in Q3, positioning it as a strong competitor in the cloud space [7]. Capital Expenditures - Both companies are planning substantial investments in their computing infrastructure, with Alphabet forecasting $175 billion to $185 billion and Amazon expecting $200 billion in capital expenditures for 2026 [9]. Market Position and Valuation - Both companies hold premium valuations due to their leading positions in their respective industries, with Amazon being technically cheaper but not significantly different in valuation compared to Alphabet [11]. - Wall Street analysts project Amazon's revenue growth at 12% and Alphabet's at 16%, giving Alphabet a slight edge in growth expectations [13]. Investment Outlook - Both stocks are considered strong buys, with a slight preference for Alphabet as the better investment opportunity moving forward [14].