Amazon Edges Out Alphabet in Quarterly Earnings Showdown

Amazon and Alphabet have reported impressive quarterly earnings that exceeded expectations. The two tech giants' shares soared following their releases, but investors are now weighing which company is a better buy.

A closer look at both companies reveals similarities in their approaches. Amazon operates the world's largest commerce business and has dominated e-commerce for some time, while Alphabet, with its Google family of products, primarily focuses on advertising. However, both companies have made significant strides in cloud computing, with Alphabet's Tensor Processing Unit and Amazon's AWS driving growth.

In terms of revenue growth, Alphabet takes the lead, with a 24% increase in Q2 and an astonishing 82% clip for its cloud division. Amazon's revenue growth, while strong at 20%, is skewed by its slow-growing commerce business. However, when examining operating income growth, Amazon emerges as the faster-growing company.

The valuation of both companies is similar, with Amazon slightly more expensive. Nevertheless, investors are likely to reap rewards from either stock, given their robust operational profiles and potential for long-term growth.