Amazon and Alphabet Just Crushed Expectations. Which Is the Better Buy Now?

Both companies are rapidly growing their revenue and profits.

Both Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) just posted unbelievable quarters that sent shares soaring. While the one-time pop is nice, there are also several reasons to believe that a bigger rally could be in store for both stocks.

But which is the better buy now? Let's take a look and see which one makes the most sense.

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Amazon and Alphabet may seem like odd companies to compare on the surface, but they're really quite similar. Amazon operates the world's largest commerce business and has dominated the e-commerce marketplace for some time. However, it also has a dominant cloud computing business that is a major cash cow for Amazon. In fact, Amazon Web Services (AWS) made up 60% of Amazon's operating profits during Q2.

Alphabet has the Google family of products under its umbrella, which is primarily an advertising business. It, too, has a cloud computing wing that's producing incredible results, and it's even starting to get into chip sales with its in-house designed Tensor Processing Unit.

Both Alphabet and Amazon are taking a multifaceted approach to business, and using profits from their primary business units (commerce for Amazon and advertising for Alphabet) to fund data center build-outs to increase computing capacity for their most exciting business segment (cloud computing). These two are remarkably close, so I'm giving the business approach a tie.

Alphabet has the fastest-growing business. In Q2, Alphabet's revenue rose at a 24% pace, and the all-important cloud division saw its revenue growth accelerate to a jaw-dropping 82% clip. Not to be outdone, Amazon delivered strong revenue growth of 20%, and AWS saw its growth accelerate to 37%. Make no mistake, these are solid results from both companies, but Amazon's revenue growth rate is skewed by its slow-growing commerce business.