2 Cloud Giants I Am Buying in September and 1 I Am Avoiding

The three largest cloud computing suppliers are Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and Microsoft (NASDAQ: MSFT). These three command a large two-thirds market share mixed. However, not every single one of these shares makes for a sensible buy proper now.

So, of the three, which two am I shopping for, and which makes the most sense to steer clear of? Let’s take a look.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/a hundredth the measurement of Nvidia. Continue »

AWS and Google Cloud growth charges are accelerating

The purpose the cloud computing giants are thriving proper now is due to the unbelievable AI workload demand. The AI revolution will seemingly go down in historical past books as one of the more impactful applied sciences ever devised, and these three are primed to money in on it.

Few corporations have the computing energy essential to prepare and run AI fashions, so they rent computing capability from one of the three main cloud computing suppliers. There is far more demand than there is provide, and the three are scrambling to construct out as many knowledge facilities as attainable so they can seize market share. That’s why they’re spending lots of of billions of {dollars} on knowledge facilities, and it seems to be paying off.

Amazon Web Services (AWS) holds the largest market share of the three, and is the slowest-growing as a consequence. In the second quarter, its income rose 37% 12 months over 12 months. However, this marks a main acceleration. Last 12 months, AWS’ growth fee hovered in the low 20% vary, which makes this 12 months’s growth fee all the more unbelievable.

Alphabet’s Google Cloud is having the most spectacular efficiency of the three. In Q2, Google Cloud’s income rose 82% 12 months over 12 months. Its working margin also rose to 36%, marking a main enchancment from years previous. Google Cloud is the fastest-growing of the three, and with Alphabet spending around $200 billion on knowledge facilities this 12 months, this growth fee will seemingly keep elevated for some time.

Microsoft Azure is the next fastest-growing cloud business. Azure grew at a 43% tempo, but there’s one difficulty I take with it: Its growth fee has hardly modified. Last quarter, it was 40%. The quarter before that, it was 39%. While these are strong growth charges in a vacuum, they look a bit suspicious when in contrast to its friends that are experiencing accelerating growth charges.

As a consequence, Microsoft is on my keep away from listing. Unless it can begin reporting significant income acceleration in its Azure division, AWS and Google Cloud will begin to draw back in phrases of market share. That hole may be unimaginable to close in the future.

However, that’s not the only purpose I’m avoiding Microsoft.

Microsoft’s total income are growing more slowly

All three of these corporations are investing in varied quickly growing AI corporations, and that’s skewing their internet income. As a consequence, I think wanting at their working income growth is a great measure of how their income are growing. From this standpoint, Amazon and Alphabet are growing at a far higher fee than Microsoft.

AMZN Operating Income (Quarterly YoY Growth) knowledge by YCharts

This reveals that Amazon’s and Alphabet’s spectacular efficiency in the cloud computing space is leaking over into companywide outcomes, while Microsoft’s aren’t. If Microsoft would not begin accelerating its cloud growth, this development may proceed, further increasing the lead that Amazon and Alphabet have as investment choices.

Alphabet and Amazon look like much better investments than Microsoft proper now. And I won’t be stunned to see their shares outperform over the next few years while Microsoft still enjoys market-beating efficiency, but just underperforms its competitors.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again

In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. If you’d invested $5,000 then, you’d be sitting on $2,889,281 as we speak.*

Now, for the first time in years, that same “Total Conviction” signal is flashing for a company 1/a hundredth the measurement of Nvidia. It’s a key participant in the $1.8 trillion space race, and with the stock just lately sitting 20% off its highs, the window to get in early is closing fast.

Continue »

*Stock Advisor returns as of September 21, 2026

Keithen Drury has positions in Alphabet, Amazon, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool has a disclosure coverage.

Amazon, Alphabet, and Microsoft: 2 Cloud Giants I Am Buying in September and 1 I Am Avoiding was initially printed by The Motley Fool