Amazon and Alphabet excel in artificial intelligence growth

Two Artificial Intelligence (AI) stocks are highlighted as good buys for March. **Amazon** Amazon is a leader in retail and has over 200 million Prime members. The company is also a major player in AI, particularly through its cloud service, Amazon Web Services (AWS). AWS saw revenue increase by 19% year-over-year in the last quarter. It helps businesses create AI applications, contributing significantly to Amazon's profits. Although AWS accounts for only 15% of Amazon's overall business, it generates about half of its operating profit. Amazon is also using AI to improve its online shopping experience. Tools like AI-powered shopping assistants can help increase sales in its vast online store. Last year, Amazon earned $59 billion on total revenue of $638 billion. Analysts predict earnings will grow at a rate of 21% annually. **Alphabet (Google)** Alphabet, the parent company of Google and YouTube, is also benefiting from AI. The company generates substantial revenue from digital advertising. In the fourth quarter, Google Search alone brought in $54 billion, contributing to a total revenue of $96 billion. Alphabet's profit reached $100 billion in 2024. Despite challenges in the advertising market, Alphabet's revenue still grew by 10% in 2022. The company is effectively integrating AI across its services, with its Gemini AI model being a standout. This model enhances services used by over 2 billion people, attracting more advertisers. Alphabet's cloud division is also growing rapidly, with a 30% revenue increase year-over-year. Analysts expect Alphabet's earnings to grow at 17% annually, making its stock appealing now due to its modest price-to-earnings ratio of 18. Investors see these AI stocks as strong opportunities amid market changes.