By Will Healy – Mar 29, 2026 at 10:34AM EST
Key Points
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Alphabet’s massive liquidity and role in AI positions it well to make productivity gains without worrying about interest rates.
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AI investment helps boost Amazon’s productivity in both its cloud and e-commerce segments.
Alphabet
At first, one might think investors in Google parent Alphabet (GOOGL 2.30%) (GOOG 2.45%) would not welcome the end of interest rate cuts. For all of the focus on new technologies, digital ads remain its primary revenue source, and that could mean lost business if customers have to contend with higher rates.
Nonetheless, Alphabet continues to look to its AI-driven future. Its most visible sign of that is Google Cloud. In 2025, its revenue grew by 36%, far above the 15% for the overall company. This is critical because AI fuels productivity gains. Assuming such gains mean customers have to borrow less money, it could lead to benefits even in today’s interest rate environment.
Additionally, investors have focused increasingly on the market-gains of Google Gemini and the successes of autonomous driving company Waymo. Although these do not show up directly in the company’s financials, they look to be growth drivers that could speed the company’s transition away from digital ads.
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NASDAQ: GOOGL
Alphabet
Today’s Change
(-2.30%) $-6.45
Current Price
$274.47
Key Data Points
Market Cap
$3.3T
Day’s Range
$273.96 – $279.37
52wk Range
$140.53 – $349.00
Volume
1.4M
Avg Vol
33M
Gross Margin
59.68%
Dividend Yield
0.31%
In 2025, Alphabet earned net income of $132 billion, 32% more than in 2024. This and its $127 billion in liquidity position it to invest a staggering $175 billion to $185 billion in capital expenditures (capex) this year, growth that will ly boost growth in the future. Amid Alphabet’s increased success, the 27 P/E ratio seems a relatively low valuation considering its prominent role in the tech industry.
Investors should also remember that Grand View Research forecasts a 31% compound annual growth rate (CAGR) for the AI industry through 2033. That should make it more ly to earn returns from its massive capex investments.
Under current conditions, one can buy 8.5 s for around $2,460, an excellent starting position in a tech stock that operates largely independently from interest rates.
Amazon
Admittedly, one might not think of Amazon (AMZN 3.89%) as a company that welcomes steady interest rates. Indeed, its largest revenue source is online sales, and it “sells everything,” so it seems lower rates would be a net benefit.
However, the growth and profit engine of the company is Amazon Web Services (AWS). It accounted for $46 billion of the company’s $80 billion in operating income in 2025.
As the leading cloud computing company, it plays a prominent role in the AI field. Moreover, Amazon incorporates AI into its online sales sites and digital ads, and improves productivity in its fulfillment centers.
Such improvements can money for both the company and, by extension, its customers. Thus, Alphabet, Amazon will fuel productivity gains that can make activities tied to higher interest rates less significant.
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NASDAQ: AMZN
Amazon
Today’s Change
(-3.89%) $-8.07
Current Price
$199.47
Key Data Points
Market Cap
$2.1T
Day’s Range
$199.14 – $206.62
52wk Range
$161.38 – $258.60
Volume
2.6M
Avg Vol
50M
Gross Margin
50.29%
To this end, it plans to spend a staggering $200 billion on capex this year. Fortunately, it holds about $123 billion in liquidity and earned $78 billion in net income in 2025, indicating it can afford this expense without having to turn to the debt market.
Additionally, investors should keep an eye on valuation. Its P/E ratio has fallen to 30. While it compares well to the S&P 500 average of 28, Amazon is a stock that usually commanded P/E ratios above 50 in the recent past, arguably making it a generational buy.
As conditions stand now, a $2,540 investment buys 12 s in the company. As its massive capex spending starts to deliver returns for the business, its low valuation could fuel a disproportionate benefit for its holders.
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About the Author
Will Healy is a contributing Motley Fool stock market analyst covering technology and consumer goods industries. Before The Motley Fool, Will was a freelance writer covering stocks and personal finance for MSN Money, Yahoo! Finance, and Nasdaq. Earlier in his career, he was an expert in geographic information systems, applying spatial and IT skills to perform RF and demographic analysis in the telecom industry. He holds a bachelor’s degree in journalism from Texas A&M University and an MBA in finance and strategy from the University of Texas at Dallas.
Stocks Mentioned
Alphabet
NASDAQ: GOOGL
$274.34
(-2.34%)-$6.58
Amazon
NASDAQ: AMZN
$199.47
(-3.89%)-$8.07
Alphabet
NASDAQ: GOOG
$273.85
(-2.45%)-$6.89
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
Sumber Artikel:
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