Amazon vs. Alphabet vs. Meta: This analyst’s top AI pick

Yahoo Finance Video and Julie Hyman

December 5, 2025

In this video:

•                                       StockStory Top Pick 
  

  META

  +1.69%

 GOOG  

 +3.74%  

 

 

 AMZN  

 +2.56%  

RBC Capital Markets Equity Analyst Brad Erickson comes on Market Catalysts to discuss whether Alphabet’s Google (GOOG, GOOGL) may have an advantage in the AI race through its TPU chips (Tensor Processing Units), Amazon’s (AMZN) newly announced AI chips, and which tech stock he prefers when choosing between Alphabet, Amazon, and Meta Platforms (META).

Also catch Brad Erickson weigh in on reports that Meta will be reducing its Metaverse budget.

To watch more expert insights and analysis on the latest market action, check out more Market Catalysts.

Video Transcript

00:00 Speaker A

Let’s talk about the the TPU side of things also because, you know, there was a story today that called it sort of their secret weapon or secret sauce if you will. So even if they didn’t win in chat themselves, are is that sort of the back stop that they’re going to be selling enough of those TPUs to the even their competitors that that that they’re still going to win.

00:32 Speaker B

Yeah, so I mentioned there’s been a lot of news flow just in the last few weeks that you’re right on the TPUs that just came out, uh I think early last week. So that’s been the catalyst here even most recently. Um you know, what I would say there is it’s hard to call it the secret sauce when you’re on almost version 8 of Google’s TPUs. It’s been out for a little while.

00:54 Speaker A

Not so secret in other words.

00:56 Speaker B

Yeah, exactly. But but it is a very important piece. I think, you know, it’s it’s hard to say, right? Like TSMC who kind of back stops or is the the lowest common denominator on the production of these chips. Um they’ve already given their allocations to these guys for 26 and probably into 27. So it’s a little bit hard to make the case from a sort of excess uh capacity standpoint that Google might have or that Google’s ODM partners might have to produce these chips, but it is certainly possible and and positive. I think the question we raised in our note last week around this was that, you know, this could very well be meta and and speaking to Meta’s partnership with Google that kind of got this all going. This very well could just be meta sort of testing the waters, trying to trying to have a negotiating tactic with Nvidia. And so and so it’s really hard to know, um, you know, to the extent that this really could kick in in 26, but I think the bulls for Google and what the stock is telling us is, hey, we’re we are potentially ready to bet on this in 26 and 27, really starting to hit numbers.

02:12 Speaker A

And speaking of a lot of news flow, we also heard from Amazon, right? Um and got some new product introductions and um some chip news there. So, how do they stack up when you’re talking about all of these other competitors?

02:30 Speaker B

Yeah, so, uh, not a totally, uh, same situation, but certainly, you know, the the intrigue there has been around their own, um application specific ICs, their own A 6, which, uh, you know, is Trainium two, which is what Anthropic has been using and then obviously there’s a ton of intrigue on how Trainium three will roll out and that’s a, that’s a chip that they will be selling to a far bigger audience in terms of the company, the number of companies that use that chip. And so, I think the view there is is, you know, power is still probably the bigger constraint for AWS, uh, expanding its capacity in 2026. Certainly has been recently, but I think people are, um, you know, cautiously optimistic that Amazon can bring that Trainium three product to market in a bigger way and potentially again, further that acceleration story with AWS next year.

03:36 Speaker A

And and Brad to be clear from an investment perspective, you’ve got outperform ratings on on these three guys. You know, you don’t cover Nvidia but, you know, when we’re talking about Amazon, Alphabet, and Meta, you think that there is a case to be made for for buying all three of these companies.

03:57 Brad

Yeah, yeah, certainly. Like I said, Google was our favorite idea for 2025. Um and it was mostly we were sort of focused on the controversy, right? At the time open AI was kind of leading the way on that. But but Meta is a stock we’ve been pushing for four years since they we found the sort of uh algorithm recovery from the Apple signal loss in our own channel checks. Um and and then obviously with Amazon, you know, we’ve kind of felt all along with this AI situation, a lot of the value creation probably should accrue to the hyperscalers, the infrastructure, the owners of the infrastructure as kind of the gatekeepers to the compute that you need for AI. We continue to to generally believe that. So, yeah, those are kind of the arguments around all three.

04:54 Speaker A

Do you have a favorite one for 2026 yet?

04:57 Brad

We have not come out with our 2026 outlook. So I’ll say that, you know, again, Google has been kind of our favorite idea. um and and, you know, we we like all three, we like Amazon as well.

05:14 Speaker A

Okay. We’ll have you back when you come out with that outlook, Brad. Thank you very much. Appreciate it.

05:18 Brad

Sounds good.

Terms and Privacy Policy

Privacy Dashboard

More Info