Amazon vs. Alibaba: One Is Clearly The Better Value Play right Now

Summary

For all their similarities, the near-term prospects of Amazon.com Inc NASDAQ: AMZN and Alibaba Group Holding Ltd NYSE: BABA have rarely looked more divergent than they do right now. Amazon is up around 17% year to date and was setting fresh all-time highs just last week following another impressive earnings report. Alibaba, meanwhile, is down roughly 8% over the same period, continues to trade around 2017 levels and reported a revenue miss in its earnings this week. At first glance, that might make Alibaba look like the obvious value play. After all, the company trades on a lower price-to-earnings (PE) multiple than Amazon and still has meaningful upside if China’s economy stabilizes and its AI ambitions gain traction. However, once you dig deeper into growth, execution, and momentum, the picture starts looking very different.Get Alibaba Group alerts:Sign Up In fact, there’s a strong argument that Amazon, despite appearing more expensive on the surface, may actually be the cheaper stock right now. Let’s jump in and take a closer look below. Amazon Is Executing Much Better Right NowThe biggest difference between these two companies at the moment is execution. Amazon’s most recent earnings report reinforced just how strong the company’s current position really is. Revenue and earnings comfortably beat expectations, guidance remained strong, and investor hopes for AWS continue to build as artificial intelligence (AI) spending explodes across the broader market. Amazon.com Today$268.15 -1.98 (-0.73%) As of 01:01 PM Eastern This is a fair market value price provided by Massive. Learn more.52-Week Range$196.00▼$278.56P/E Ratio32.08Price Target$312.52 That AWS angle is incredibly important. Amazon stopped being valued simply as an e-commerce company many years ago. The shift to it being a computing powerhouse, though, is still underway, and there’s a ton more upside. Investors are increasingly viewing it as one of the key infrastructure providers powering the AI boom, and ...