Amazon's massive AI investments are already paying off with AWS revenue accelerating to its fastest pace in nearly four years; the company has clear line of sight to returns and AWS alone could drive two-thirds of operating value.
Alphabet (Google) has a structural advantage over competitors like OpenAI because it is vertically integrated with its own chips, cloud service, and Gemini AI model. As OpenAI struggles to meet sales targets, Google is well-positioned to gain market share, especially in the enterprise cloud and AI space. This positive view is supported by expectations of strong cloud growth and margin expansion.