Comparing Alibaba and Amazon: Which Mega-Cap Cloud Stock Has More Upside?

Alibaba (BABA) and Amazon (AMZN) are mega-cap stocks with a market capitalization of $200 billion or more. Alibaba has surged 45% this year, driven by AI-driven cloud demand and strong momentum in instant delivery services. Amazon has surged 5% this year, driven by strength in its cloud unit, Amazon Web Services (AWS). Wall Street expects Alibaba to report Q1 FY26 earnings of $2.16 per share, down 6% from the year-ago quarter, while Amazon is expected to continue its growth in the cloud sector. Analysts project Alibaba's Q1 revenues at $35.49 billion, up 6% year-over-year, while Amazon's cloud unit is expected to continue driving growth.

Alibaba Group Holding Ltd (BABA) and Amazon.com Inc (AMZN) are two of the world's largest tech giants, each boasting a market capitalization of $200 billion or more. Both companies have shown significant growth in their respective cloud units and e-commerce businesses, with Alibaba surging 45% this year and Amazon gaining 5% [1].

Alibaba's Q1 FY26 Earnings Expectations

Alibaba, led by CEO Eddie Wu, has been driving growth through its AI-driven cloud services and instant delivery initiatives. Wall Street analysts expect Alibaba to report Q1 FY26 earnings of $2.16 per share, down 6% from the year-ago quarter. However, revenue projections are more optimistic, with analysts forecasting Q1 revenues at $35.49 billion, up 6% year-over-year [1]. The company's strong performance in AI and cloud services, as well as its instant commerce initiatives, have positioned it well for continued growth.

Amazon's Q1 FY26 Earnings Expectations

Amazon, led by CEO Andy Jassy, has been focusing on its cloud unit, Amazon Web Services (AWS). The company has seen a 5% year-over-year increase in its stock price, driven by the strength of its cloud unit. Analysts expect Amazon's cloud unit to continue driving growth, with AWS revenue expected to increase by 17% year-over-year in Q1 FY26 [1]. The company's focus on cloud services and its robust financial position have made it a favorite among investors.

Comparative Analysis

Both Alibaba and Amazon have shown strong growth in their cloud units, with Alibaba's cloud services accelerating to 18% year-over-year growth in Q4 2025 [1]. However, Alibaba's focus on AI and instant commerce services sets it apart from Amazon, which has a broader range of businesses. Alibaba's AI momentum has been particularly strong, with AI-related product revenue sustaining triple-digit growth for seven consecutive quarters [1].

Risks and Challenges

Both companies face significant risks and challenges. Alibaba is subject to intense competition in e-commerce and cloud services, as well as potential impacts from regulatory changes in China. Amazon, on the other hand, faces competition in its cloud unit and regulatory scrutiny in various markets [1].

Conclusion

Alibaba and Amazon are two of the world's leading tech giants, each with its own strengths and challenges. While Alibaba's focus on AI and instant commerce sets it apart, Amazon's broad range of businesses and strong cloud unit make it a formidable competitor. As both companies continue to grow, investors will be watching closely to see how they navigate the challenges and capitalize on the opportunities in their respective markets.

References

[1] https://za.investing.com/news/transcripts/earnings-call-transcript-alibabas-q4-2025-revenue-up-7-ai-expansion-highlighted-93CH-3840585