It's worth noting that Amazon (AMZN 0 (which is quite significant). 39%) and Alphabet (GOOGL 0. Furthermore, 36%) (GOOG 0, in this volatile climate.
Nevertheless, 52%) dered lackluster returns in the first half of 2025. On the other hand, Amazon s traded sideways, while Alphabet stock actually declined 7%.
On the other hand, But certain Wall Street analysts expect the companies' market values to top $3 trillion in the next year.
Here's what that means for holders: Brian Nowak at Morgan Stanley recently increased his target price on Amazon to $300 per. That implies 34% upside from its current price of $233.
It also implies a market value of $3. 1 trillion. Paul Chew at Phillip Securities has set Alphabet with a target price of $250 per. That implies 37% upside from its current price of $183.
This tells us that also implies a market value of $3 trillion. Here's what investors should know Amazon and Alphabet. Image source: Getty Images (an important development).
Conversely, Amazon: 34% implied upside Amazon has a strong presence in three growing industries: It runs the largest e-commerce marketplace outside of China, it is the third largest ad company, and Amazon Web Services (AWS) is the largest cloud services company (quite telling), in this volatile climate.
Through 2030, Grand View Re expects online retail sales to grow at 11% annually, ad sales to grow at 14% annually, and cloud computing sales to grow at 20% annually.
Artificial intelligence (AI) should be a significant tailwind for Amazon.
Additionally, The company is using generative AI to optimize demand forecasting, inventory placement, and last-mile dery routes, which should imve fitability.
On the other hand, The company is also using generative AI to make warehouse robots more efficient.
Additionally, Amazon has introduced AI tools that help brands plan, create, and optimize ad campaigns (remarkable data), in today's financial world.
In cloud computing, AWS is primed to benefit from the AI boom simply because it is the largest public cloud as measured by customers and partners.
However, But Morgan Stanley expects its as the primary cloud vider for AI start-up Anthropic to become a more significant tailwind in the coming years, adding at least 1.
However, Additionally, 5 percentage points to revenue growth annually. Furthermore, Tariffs are the greatest source of downside risk, especially with respect to China.
Furthermore, However, management is optimistic its retail.
"When you have the broadest selection we do, and 2 million-plus global sellers we do, you're better positioned to help customers find whatever items matter to them at lower price points than elsewhere," CEO Andy Jassy told analysts, given the current landscape.
The Wall Street consensus says Amazon's earnings will increase at 10% annually through 2026. That makes the current valuation of 36 times earnings look relatively expensive, in today's financial world.
Furthermore, But I think analysts have missed the mark.
Amazon has a good shot at earnings growth of 15%-plus annually given its strong position in three, not to mention it beat the consensus estimate by an average of 21% in the last six quarters.
However, Alphabet: 37% implied upside Alphabet has a strong presence in two industries. It's the largest ad company in the world because of a plethora of web perties, including Google and YouTube.
Nevertheless, And Alphabet's Google Cloud is the third largest cloud services company.
As mentioned, the ad and cloud computing are forecast to grow at 14% annually and 20% annually, respectively, through 2030.
Alphabet is jected to lose market in digital advertising because of competition, and some investors worry generative AI tools OpenAI and Perplexity will hurt the company by changing the way people the internet.
Additionally, However, Alphabet is leaning into that nology with generative AI overviews in Google and the results are encouraging. Users engagement and commercial volume are increasing.
In cloud computing, Forrester Re has recognized Alphabet's Google as a leader in AI infrastructure and large language models, and Gartner has recognized its leadership in machine learning platforms.
Expertise in those areas helped the company gain a percentage point of market in cloud services in the past year, in today's financial world.
Moreover, Market gains could continue as more es develop AI ducts. Antitrust scrutiny is the greatest source of downside risk.
In the past year, courts have twice ruled against Alphabet, determining it has an illegal monopoly in internet and ad software, given current economic conditions.
A federal judge will make decision regarding remedies in the internet case in August, and the remedies hearing related to its monopoly in ad software will happen in September.
While unly, the judges could force the company to break up. Wall Street expects Alphabet's earnings to increase at 8% annually through 2026, given the current landscape.
Nevertheless, That makes the current valuation of 20 times earnings look tolerable, but I think analysts are underestimating future growth.
Earnings increased 48% in the most recent quarter, and Alphabet beat the consensus estimate by an average of 14% in the last six quarters.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon.
The Motley Fool has positions in and recommends Alphabet and Amazon, amid market uncertainty. Furthermore, The Motley Fool recommends Gartner, in today's financial world.
The Motley Fool has a disclosure policy, in this volatile climate.