MOUNTAIN VIEW, California, August 20, 2026, 10:15 PDT
- Alphabet’s forward P/E is roughly 10% lower than Amazon’s.
- Each stock presents approximately 25% potential upside compared to consensus estimates.
- Rosenblatt’s price target of $335 for Amazon suggests an upside of almost 28%.
Alphabet Inc. (NASDAQ:GOOGL; NASDAQ:GOOG) has a consensus upside comparable to that of Amazon.com, Inc. NASDAQ:AMZN, yet trades at a lower forward earnings multiple. This difference in valuation presents a challenge to Rosenblatt Securities analyst Scott Devitt’s latest AI-growth thesis for Amazon.
On August 19, Devitt initiated coverage of Amazon with a Buy rating. He set a price target of $335, representing a 27.9% gain from Thursday’s closing level of $261.86. Devitt called Amazon a top pick and pointed to its strength in AI and its solid business-model performance.
Alphabet’s valuation narrative stands apart. The consensus price target of $428.07 points to a 25.5% potential rise, just exceeding Amazon’s 24.8% consensus difference. Still, GOOGL currently trades at 25.86 times forward earnings, which is roughly 10% less than Amazon’s 28.72 times.
| Stock | Price | Day | Forward P/E | Consensus target | Implied upside |
|---|---|---|---|---|---|
| Alphabet (GOOGL) | $341.16 | -1.03% | 25.86x | $428.07 | 25.5% |
| Amazon (AMZN) | $261.86 | -1.50% | 28.72x | $326.84 | 24.8% |
| Meta (META) | $542.60 | -0.63% | 17.05x | $754.14 | 39.0% |
| Microsoft (MSFT) | $482.85 | -0.30% | 24.57x | $569.56 | 18.0% |
The lower valuation is significant as Alphabet’s cloud division is growing at a quicker pace. Google Cloud’s revenue soared 82% to $24.77 billion in the quarter ended in June. Operating profit rose more than threefold, reaching $8.81 billion.
Amazon Web Services continued to outpace its rivals in both size and profitability. Revenue at AWS increased by 37% to $42.23 billion, marking its quickest growth in 18 quarters. The operating margin stood at 39.4%, compared with Google Cloud’s 35.6%.
| June quarter | Alphabet | Amazon |
|---|---|---|
| Company revenue | $119.80B, up 24% | $200.61B, up 20% |
| Cloud revenue | $24.77B, up 82% | $42.23B, up 37% |
| Cloud share of revenue | 20.7% | 21.1% |
| Cloud operating income | $8.81B | $16.62B |
| Cloud operating margin | 35.6% | 39.4% |
The cloud comparison leaves two main contenders. Amazon benefits from larger scale and a margin advantage of four points. Alphabet is growing more quickly and trades at a lower earnings multiple.
Alphabet CEO Sundar Pichai stated that Google Cloud’s expansion was fueled by “demand for AI infrastructure and AI solutions.” Amazon CEO Andy Jassy reported that AWS was experiencing its highest growth rate in 18 quarters. The executives made these remarks in conjunction with the latest financial results. Alphabet; Amazon
| Date | Firm / analyst | Stock | Action | Target |
|---|---|---|---|---|
| Aug. 20 | Bernstein / Mark Shmulik | GOOGL | Maintain Hold; target lowered | $385 from $390 |
| Aug. 19 | Bank of America / Justin Post | GOOGL | Buy confirmed | Not disclosed |
| Aug. 19 | Rosenblatt / Scott Devitt | AMZN | Resumed coverage; Buy assigned | $335 |
| Current consensus | 64 analysts | GOOGL | Strong Buy: 46 strong buy, 13 buy, 5 hold | $428.07 |
| Current consensus | 60 analysts | AMZN | Strong Buy: 43 strong buy, 15 buy, 2 hold | $326.84 |
Bernstein Research, a division of AllianceBernstein Holding L.P. NYSE:AB, lowered its target for Alphabet to $385 and maintained a Hold recommendation in a note Thursday. On the day before, Bank of America Corporation NYSE:BAC analyst Justin Post reaffirmed a Buy rating.
Investors are advised to look beyond headline earnings figures. Alphabet’s results featured a $77.1 billion after-tax gain tied to equity securities. Amazon posted $53.4 billion in pretax other income, primarily due to its Anthropic stake. These gains mean that forward multiples provide a clearer picture.
| Quality-of-earnings review | Alphabet | Amazon |
|---|---|---|
| Net income reported | $112.11B | $62.65B |
| Gains from investments | $77.10B after tax | $53.40B before tax |
| Underlying operating trend | Operating profit +30% | Operating profit +43% |
| Main valuation metric | Forward earnings | Forward earnings |
Shares in Meta Platforms, Inc. NASDAQ:META and Microsoft Corporation NASDAQ:MSFT also declined on Thursday, indicating widespread selling among major technology stocks rather than issues limited to individual firms. Alphabet lost 1.0%, and Amazon shed 1.5%.
The immediate challenge is delivering results. Amazon projected third-quarter revenue between $197 billion and $202 billion with operating income ranging from $22.5 billion to $26.5 billion. Alphabet needs to demonstrate that the rapid momentum in Cloud can persist as year-on-year comparisons become more demanding.
Risks: AI infrastructure investments have the potential to exceed actual demand. Shifts in regulation, competitive pricing in cloud services, and swings in investment returns could also alter the earnings trajectories for both firms.
Currently, Rosenblatt’s Amazon recommendation holds the highest individual target return. In contrast, Alphabet stands out with a clearer valuation. The company’s comparable consensus upside features a forward P/E that is 10% lower, along with more rapid cloud revenue growth.
Related articles: NASDAQ:GOOGL
AI growth, priced below Amazon
Market snapshot: August 20, 2026, 13:02 EDT (19:02 CEST), while Nasdaq trading was open. Prices are U.S. dollars.
12-month price path
Forward valuation
P/ECloud engine · June quarter
Year over yearAmazon has the larger base and a 3.8-point margin lead. Alphabet has the faster growth rate.
Street view
Latest available| Signal | GOOGL | AMZN |
|---|---|---|
| Consensus | Strong Buy | Strong Buy |
| Rating split | 46 strong buy · 13 buy · 5 hold | 43 strong buy · 15 buy · 2 hold |
| Target range | $340–$515 | $230–$405 |
| Fresh action | Bernstein Hold, $385 | Rosenblatt Buy, $335 |
What supports the thesis
Evidence| Google Cloud | 82% revenue growth |
| Company revenue | 24% growth to $119.80B |
| Operating income | 30% growth to $40.77B |
| Valuation | Similar target upside to AMZN at a lower multiple |
What can break it
Risk mapReported net income included a $77.1B after-tax equity gain. Forward earnings are the cleaner comparison.
Sources: Alphabet and Amazon SEC-filed June-quarter results; StockAnalysis quote, valuation, price-history and analyst pages; Rosenblatt coverage reported by The Fly via TipRanks. Calculations use unrounded figures where available. Market data observed August 20, 2026, 13:02 EDT (19:02 CEST).
