Google vs. Amazon – Which Stock Should You Buy?
Amazon and Alphabet (Google) are 2 of the world’s most recognisable brands and are among Wall Street’s favourite blue-chip companies. Both stocks have increased in value this year – Amazon started 2017 at less than $800 and is currently trading close to $1,200, while Google started out just above $800 and is now trading at a little under $1,100.
While Amazon is the e-commerce leader in the US, Google is way ahead of the pack in terms of internet search. Over the past 5 years, Amazon stock has risen by more than 323%, while Google has grown more than 150%. These returns are particularly impressive considering that the S&P 500 has gained only around 76% over the past 5 years. While both stocks are up this year, traders are currently wondering which one represents a better buy.
Both stocks exceeded Wall Street’s expectations for Q3
Amazon’s stock jumped 7% in after-hours trading on October 26th, after the company published better-than-expected results. In comparison to Thomson Reuters’ forecast of $42.14 billion, Amazon’s revenues reached $43.7 billion with EPS of 52 cents vs. the expected 3 cents. Google’s figures were also higher than anticipated, with revenues of $27.77 billion, comfortably above the $27.2 expected, and EPS of USD 9.57 rather than $8.33 expected.
Revenue growth might be larger for Amazon than for Google
Google’s primary source of revenue comes from advertising, while Amazon is constantly expanding its e-commerce operations and making acquisitions in diverse sectors, such as its purchase of upscale grocer Whole Foods. Wall Street expects revenues to keep rising for both companies: 29% in 2018 for Amazon – especially thanks to Amazon Web Services – and a 19% growth for Google, driven largely by mobile search and YouTube.
Google vs. Amazon
Both companies are high-quality businesses with bright futures and are likely to keep rewarding investors for some time to come. Even though they both offer profitable trading opportunities, Amazon seems to have larger upside growth momentum and greater competitive advantages than Google. However, Google appears to enjoy a stronger financial situation and is cheaper than Amazon.
Amazon and Google are offered by many stock brokers, and traders can invest in both companies depending on their preferred scenario (bullish or bearish) to take advantage of price movements. The UFX.com stock trading platform is one of the best online portals for traders with a short-term horizon, thanks to its huge range of CFD products and range of advanced, user-friendly features.