Investors Eye Alphabet, Amazon, and Quanta Services as Earnings Season Approaches
As the highly anticipated earnings reports for top tech giants draw near, savvy investors are setting their sights on Alphabet and Amazon as compelling buying opportunities. According to Keith Gangl, senior portfolio manager at Gradient Investments, these companies demonstrate unique value that is often overlooked, especially in the context of the rapidly evolving artificial intelligence (AI) sector.
Alphabet: Undervalued in the Land of Tech Titans
Alphabet, the parent company of Google, is slated to release its quarterly earnings this Wednesday. Despite an 8% rally this month, the stock has underperformed relative to the broader S&P 500 index, which has advanced over 7% this year. Alphabet's modest 1% gain in 2025 places it among the laggards, but that has created a strategic window for investors.
“Alphabet remains the most affordable among the so-called 'Magnificent Seven' stocks,” Gangl explains, referencing the elite group of dominant tech companies known for shaping the modern digital economy. Valued more cheaply than the overall market, the stock is recovering from a sell-off earlier this year. This relative undervaluation paired with strong fundamentals offers a promising risk-reward balance ahead of earnings.
Amazon: A Retail Behemoth with Cloud Engine Firepower
Amazon is on the docket to report earnings next Thursday and is viewed as a “strong buy” by Gangl. Though Amazon shares have climbed 3.7% year to date, they trade at a remarkably low forward price-to-earnings multiple of 31—marking the cheapest valuation in a decade.
The company’s dual engines—its retail marketplace and Amazon Web Services (AWS)—continue to drive resilience and growth. Even amid global tariff pressures, U.S. consumers have shown surprising strength. Recent retail data signals robust consumer spending, buoyed by ongoing employment gains.
“When Americans remain employed and confident, they’ll open their wallets, and Amazon is their go-to platform,” emphasizes Gangl. This insight ties into broader economic themes about consumer behavior and how tech companies serve as reliable barometers for economic health.
Quanta Services: Capitalizing on AI Infrastructure Expansion
Beyond the tech giants, Quanta Services emerges as a noteworthy player benefiting from the burgeoning AI landscape. This company, specializing in building and maintaining electric power grids, has seen its stock surge by 25% this year.
Although its valuation sits at a forward multiple of 33—considered high by some metrics—Gangl underscores the strategic positioning of Quanta Services within the infrastructure supporting AI technologies.
“Quanta is at the convergence of energy infrastructure and AI-driven innovation,” he notes. This angle is often underreported but essential, as the backbone of AI’s expansion depends heavily on robust, modernized power grids and connectivity.
Contextualizing the 'Magnificent Seven' and AI Investment Trends
The so-called 'Magnificent Seven'—including Alphabet and Amazon—represent the key pillars of tech-driven growth. However, investors are increasingly looking beyond just software and consumer internet giants to firms like Quanta Services that underpin the tech revolution behind the scenes.
This broader perspective acknowledges that the AI economy is not solely about algorithms and cloud servers but also involves critical infrastructure investments. For U.S. policymakers and economic strategists, these developments signal the importance of supporting sectors that maintain and enhance digital and energy infrastructures.
Implications for American Investors and the Broader Economy
- Valuation Opportunities: Both Alphabet and Amazon are trading at attractive valuations relative to historical standards and market peers, which could signal favorable entry points.
- Consumer Strength: Despite economic headwinds, underlying consumer resilience is supporting retail and cloud services growth, a positive sign for domestic demand.
- Infrastructure as an AI Enabler: Companies like Quanta underscore an often-overlooked linkage between infrastructure development and technological innovation.
For investors navigating a competitive and sometimes volatile market, these insights offer a multi-dimensional lens on value that transcends headline-grabbing tech stocks.
Editor’s Note
As Alphabet and Amazon prepare to reveal their latest financial results, the nuanced valuations and sector dynamics highlight a market that still rewards patience and strategic foresight. Meanwhile, firms like Quanta Services call attention to the foundational investments required for sustained AI growth. Investors and policymakers alike should reflect on how AI’s promise depends not only on software innovation but essential infrastructure resilience. Ultimately, these earnings reports may offer more than just numbers—they provide a barometer for the future trajectory of American tech leadership.
