Alphabet Stock Had its Melt-Up Moment. Will Amazon Be Next?

Alphabet (NASDAQ:GOOGL | GOOGL Price Prediction) stock was the biggest Mag Seven winner last year, thanks in part to its big lead in AI. Though the new year is less than a month old, shares of Alphabet have shown no signs of slowing down, now up just shy of 6% year to date. As the company continues investing heavily in TPUs to secure its leadership on the AI chip side, there might be no catching up to the firm, especially if it’s Gemini that’s first to achieve artificial general intelligence (AGI), whether that’s by 2030 or some years later.

In any case, it didn’t take long for investors to pound the table on Alphabet, just over a year after some feared the worst: that the search moat would erode as up-and-comers leveraged the technology to kick Google off the throne.

Nowadays, Google Search is actually being viewed as a source of a moat for Gemini. The model’s closeness to Google Search has allowed it to obtain fresh facts, and with other apps (think Gmail, Photos, and YouTube) considered, Google might also have the edge over its AI rivals when it comes to personalization. 

Alphabet’s big run was a long time coming

Perhaps the biggest win of the year came when Apple (NASDAQ:AAPL) chose Google Gemini to power its long-overdue Siri overhaul. Whether or not Apple will demo the product before the update goes live remains to be seen. Either way, a win for the Gemini-powered Siri might be an even bigger deal for Google than Apple, given Apple only seems to want the very best for its customers, even if that means teaming up with another firm.

Though shares of Alphabet are close to the priciest they’ve been in a number of years, now trading at just shy of 33.0 times trailing price-to-earnings (P/E) and less than a percentage point below all-time highs, there still seem to be a lot of potential drivers that warrant buying high.

With Google investing in Japanese startup Sakana, Gemini might be able to make big strides in Japan. Add the Waymo robotaxi opportunity and strategic acquisitions (Alphabet recently bought Common Sense Machine, a move that bolsters its 3D generative AI capabilities), and it still feels like Alphabet has what it takes to stay on top of the Mag Seven. When it comes to firing on all cylinders, nothing quite comes close, at least as far as mega-cap tech is considered.

The case for an Alphabet-like Amazon breakout

With shares of Amazon (NASDAQ:AMZN) recently gaining ground after many years of relative underperformance, though, questions linger as to whether the e-commerce and cloud titan has what it takes to finally make up for lost time. In many ways, Amazon stock seems to be in a similar spot (on the cusp of a breakout) to where Alphabet was back in early 2025. The stock has also gone from being one of the pricier Mag Seven stocks to being in the middle of the pack, with a P/E that has now retreated to the 33.0 times range.

The big question for Amazon is whether it has the right AI setup to fuel an Alphabet-like melt-up. With Amazon Web Services (AWS) showing early signs of strength last quarter, I certainly wouldn’t be surprised if such strength were to intensify in 2026.

AI demand is heating up in a big way, and with Amazon making moves to strengthen its stack, with Bedrock improvements, new AI agents, and its own line of AI chips (Trainium for training and Inferentia for inference), perhaps all it takes is a strong quarter and an impressive guide to fuel an impressive run. 

Beyond an AWS growth surprise, Amazon is placing big bets in warehouse robotics, which positions it well (perhaps at the top) when the physical AI revolution takes hold. Undoubtedly, there’s a lot of retail margin to be had, and it might make e-commerce exciting again, even if consumer spending doesn’t pick up traction in the new year. For investors seeking an effective AI monetizer, Amazon stands out as a name to stick with in 2026.