Alphabet Inc. (GOOGL)vs Amazon.com, Inc. (AMZN)

Quick verdict

Alphabet and Amazon both sit in the mega-cap technology bracket, yet they answer to different economic forces: one sells advertising space against search and video demand, the other moves physical goods and rents computing capacity. On the supplied metrics Alphabet takes the honours on quality, balance sheet and income, Amazon wins clearly on valuation, and growth and momentum are genuinely too close to call — the overall tally reads 4-2 to Alphabet. At the 4 September 2026 close Alphabet's market capitalisation was $4,166.1bn against Amazon's $2,788.4bn, on trailing twelve-month revenue to June 2026 of $445.9bn and $775.7bn respectively. That inversion — the smaller top line carrying the larger price tag — is the whole story in one line, and it rests on Alphabet's 33.1% operating margin versus Amazon's 12.1%. Earnings-based ratios were withheld for both, as explained below.

At-a-glance comparison

Business model and revenue mix

Google Search, YouTube, Android and Google Cloud sit under Alphabet, with advertising supplying the bulk of revenue — a stream tied to marketing budgets and consumer attention, and one that carries a 60.9% gross margin on the twelve months to June 2026. Amazon's shape is different in kind rather than degree: the largest online marketplace, the AWS cloud platform, Prime subscriptions and a rapidly growing advertising arm, blending low-margin retail logistics with high-margin computing. That mix produces a 50.8% gross margin and a much larger $775.7bn revenue base, roughly three-quarters larger than Alphabet's. Classification follows the economics — Alphabet is filed under Communication Services, Amazon under Consumer Cyclical, Internet Retail. Both report operating income directly, so no proxy measure is needed. The practical consequence is that Amazon's results respond to household spending and warehouse throughput, Alphabet's to the advertising cycle.

Valuation

On every multiple supplied, Amazon is the cheaper of the two, and the verdict goes its way. Its price-to-sales ratio of 3.59 sits well below Alphabet's 9.34; enterprise value to EBITDA is 16.83 against 24.36; price-to-book is 5.05 versus 6.50. Trailing price-to-earnings was withheld for both companies, and the PEG ratio for Alphabet, because in each case trailing net income sits far above reported operating profit — $244.2bn against $147.6bn at Alphabet, $135.3bn against $93.7bn at Amazon — so the gap reflects non-operating gains rather than trading performance, and an earnings multiple built on it would mislead. Free cash flow yields tell a similar story from a different angle: Alphabet's 1.28% is thin, while Amazon's is negative at -0.42%, reflecting cash outflow rather than a bargain. All multiples are struck at the 4 September 2026 price.

Growth profile

Neither company separates itself here, and the factor is scored a tie. Measured from fiscal 2022 to fiscal 2025, revenue compounded at 12.51% a year at Alphabet and 11.73% at Amazon — close enough that the ordering is not meaningful. Stretch the window back to fiscal 2020 and Alphabet's 17.15% five-year revenue CAGR leads Amazon's 13.18%, though that longer run captures the pandemic-era distortion in both businesses. On earnings, Alphabet's three-year EPS CAGR of 33.34% and five-year figure of 29.83% both outpace Amazon's five-year EPS CAGR of 27.96%; a three-year EPS growth rate for Amazon is not in the supplied data, so the nearer-term earnings comparison cannot be completed. Given the scale involved — Amazon adding growth onto a $775.7bn base — sustaining double-digit revenue expansion is the notable feature for both.

Profitability and quality

Quality is where the two part company most decisively, and Alphabet takes it. Operating margin on the twelve months to June 2026 was 33.11% at Alphabet against 12.08% at Amazon, a gap that reflects selling advertising inventory versus shipping parcels and building data centres. Gross margins are closer, at 60.9% and 50.77% respectively, so the divergence widens below the gross line. Return on invested capital reinforces the point: 17.59% for Alphabet, 11.97% for Amazon. Net margin and return on equity were withheld for both companies because trailing net income — $244.2bn at Alphabet and $135.3bn at Amazon — sits materially above operating profit, so ratios built on the bottom line would measure non-operating gains as much as trading. ROIC is the better guide here in any case, since it looks through the capital structure to the operating asset base.

Balance-sheet risk

Financially, both look sturdy, but Alphabet has the edge on the supplied measures. As at 30 June 2026 Alphabet held $55.9bn of cash against $100.2bn of total debt, with net debt to EBITDA of 0.26 times; Amazon held more cash at $78.2bn but also more debt at $132.5bn, for 0.32 times. The sharper distinction is liquidity: Alphabet's current ratio of 2.72 gives considerable headroom, while Amazon's 1.03 leaves current assets barely covering current liabilities — a function of a working-capital model built around supplier payment terms rather than distress. Interest cover of 65.55 times at Alphabet against 28.13 times at Amazon says both service their borrowings comfortably, with Alphabet doing so more than twice over. Amazon's negative free cash flow of -$11.6bn over the period is the one item worth watching against that thinner liquidity position.

Price performance and shareholder returns

Shareholder distributions are a one-sided comparison, and the income verdict goes to Alphabet by default. Alphabet paid $0.85 per share over the twelve months to June 2026, a dividend yield of 0.25% at the 4 September 2026 price, absorbing just 4.22% of earnings — a payout ratio low enough to leave substantial scope for increases, though the starting yield is negligible for anyone seeking income. A buyback yield of 0.42% adds modestly to the total return from distributions. Amazon pays no dividend at all: yield, dividend per share and payout ratio are all zero, and the supplied buyback yield is likewise zero, meaning capital is being retained and redeployed rather than returned. Neither name is an income holding in any conventional sense; the difference is that Alphabet has at least begun the process.

Which stock fits which investor

The style tags capture the split: Alphabet is labelled high-quality, Amazon a blend. Investors prioritising valuation discipline will find Amazon the more appealing of the pair, with price-to-sales of 3.59 and EV/EBITDA of 16.83 against Alphabet's 9.34 and 24.36. Those focused on margin structure and capital efficiency have the clearer case in Alphabet, at 33.11% operating margin and 17.59% ROIC. Growth-oriented buyers also tilt to Alphabet on the supplied data, given its 17.15% five-year revenue CAGR and 33.34% three-year EPS CAGR, though the three-year revenue figures are effectively level. Income seekers have only one candidate, and a marginal one, at a 0.25% yield. Overall the scorecard reads 4-2 in Alphabet's favour, with the caveat that the entire valuation factor — the single largest objection — runs the other way.

• Value: AMZN
• Growth: GOOGL
• Income: GOOGL
• Quality: GOOGL

Frequently asked questions

Why is there no price-to-earnings ratio for either company?

Trailing P/E was withheld for both because reported net income sits far above operating profit — $244.2bn versus $147.6bn at Alphabet and $135.3bn versus $93.7bn at Amazon for the twelve months to June 2026. The gap reflects non-operating gains, so an earnings multiple would not measure trading performance. Net margin and return on equity were withheld for the same reason; Alphabet's PEG was also withheld.

Which company is larger?

It depends on the measure. Amazon has the bigger business by revenue, at $775.7bn for the twelve months to June 2026 against Alphabet's $445.9bn — roughly three-quarters larger. Alphabet is the more valuable, with a market capitalisation of $4,166.1bn at the 4 September 2026 close versus Amazon's $2,788.4bn.

Why is Amazon's free cash flow negative?

Amazon's free cash flow for the twelve months to June 2026 was -$11.6bn, giving a free cash flow yield of -0.42%. The supplied data shows the outflow but not its composition. Alphabet generated $53.3bn over the same period, a 1.28% yield at the September 2026 price.

Does either stock pay a dividend?

Alphabet does, modestly: $0.85 per share over the twelve months to June 2026, a 0.25% yield, with a payout ratio of 4.22%. Amazon pays nothing — its dividend yield, dividend per share and payout ratio are all zero, as is its buyback yield.

Which has the stronger balance sheet?

Alphabet, on the supplied measures. At 30 June 2026 its current ratio was 2.72 against Amazon's 1.03, and interest cover 65.55 times against 28.13 times. Leverage is low at both: net debt to EBITDA of 0.26 times at Alphabet and 0.32 times at Amazon.

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