Amazon vs Google Stock | Which Stock is Best for the Next 5 Years? | AMZN vs GOOG
Are you ready ready all right let’s go kevin here top one to financial advisor hey best selling author we are here to talk about the stock market whoo this might be one of the hardest questions i’ve had to answer and this comes from the comment section and the question was which stock do i think is going to be the best which one do i think is going to be better
It’s a better way to phrase that over the next five years amazon or alphabet alphabet is also known as google ticker symbol g-o-o-g or ticker assemble g-o-o-l doesn’t really matter we can go into details as to why there are two ticker symbols for the same thing but that’s beside the point in either case both are two of the most powerful companies on the face of
The earth both have social issues and then both are also doing stock splits this year so which one is going to be best in the in the next five years which one would i prefer to have i do currently own both but i may be looking to make a change for at least one of these this coming summer we’ll see um so here’s what i’m looking at i’m i’m going to take into some some
Historical context i think that’s important but i you know the past didn’t predict the future so yes i’m going to show you what both companies did in the past five years i’m not going to just take that and say oh look and say that these these trends are going to continue i don’t think that is the smartest thing to do so i am going to look at that but i’m really going
To look at the strategies of how these businesses work and you’re going to hear me talk about margin margin in this context is how much these companies are making and what is the gap between what they spent and what their profit is that that gap is margin so for example grocery stores are known to run on very thin margins which means that i bought something for
A dollar i’m selling it for 10 cents that margin is really really thin but if i’m selling something for 10 cents i’m making a profit or 10 cents times a million products that’s a lot of money but again margins are very small whereas other companies may have large margins because they spent you know very little for it and the price for it is much higher so that’s
Where i’m really gonna focus here and and that’s where my answer is going to be derived from so let’s go ahead and look at the chart real quick past five years amazon is a clear winner here in this case um in this case you can see here amazon is up 287 compared to google at 240 both are really good okay they both beat the stock market by a mile during this time
But you know if i’m just looking at that which i don’t think is the best smartest thing to do is to look at the last five years and say hey let me just take that they both beat the market in fact the stock market as a whole was only up 92 percent in the last five years he got 240 and 2 286 287 that’s that’s a clear answer to me right that’s that’s super clear um
The problem here though is when you look at amazon and you can kind of see this and i’ll mark this on the uh on the video as well but if i look at the past five years you’ll see there’s a point where amazon just kind of stalls here for whatever reason it you know took off at the pandemic and really just started to stall i think that is my i’m not going to call
My biggest concern because i don’t want to zoom in and say this one year means that you know forever and ever is going to stay in this space i don’t think that is a great analysis or a great piece of information but there are some things that are happening with the company that concerns me that i don’t think really exist for google at this point in time so let me
Give you this before i get into that is over the past year the answer is is different right the first time the first chart five years ago it was amazon easily and now it’s google by a mile and you see here we’re talking 35 percent gain in the last year where amazon could barely barely got you over four percent keep in mind inflation was up during this time so i
Really didn’t make any money if if we’re being honest right so inflation really took away what uh what money i may have made in amazon over the past year but we want to know next five years so my answer is is google and the reason why i say that is just because the way that google is organized and the way that amazon is organized and what amazon is looking to do
They got some people to say amazon is looking to take over the world they’re trying to do everything that may be true and if they are trying to take over the world and have a piece of business and every single thing out there i don’t necessarily think that’s the best strategy to go and i don’t think that’s going to make you the most money we saw i think it was
What ge back in the day uh general electric they used to own everything and then it got too costly they had to cut things and now ge is a company most people don’t even know about anymore right uh at least most people my age like back in the day ge was it it was the company they were conglomerate where they owned what felt like everything you wanted to make you
Know washers and dryers and tvs and computer i’m making a computer part but like make all these things all at the same time and be one company they couldn’t they couldn’t figure that out they couldn’t keep it together and i’m not saying amazon is there but amazon is at a much higher risk of this than where google is and here’s why for example today i saw a headline
That said that they were that rising gas prices is impacting amazon’s business well it’s obvious right you’re you’re promising two-day shipping or any shipping in that case you you have to buy your own vans to try and give that value to get stuff there within two days and now you have to pay higher fuel costs for those vehicles you have to maintain those vehicles
You’re looking to buy electric vehicles to replace the ones that that run on gas that’s a lot of money in and of itself guess who doesn’t really own that many cars google that’s the cost i don’t have to worry about guess who has to have have warehouses and have automation technology to go and pick different items and make sure they get to the same to the right places
Guess who has to own warehouses guess who who’s looking to buy physical stores for some of their items all does amazon all that cost money you just bought whole well done just buy but you bought whole foods a while back smart business move probably but guess who now has to deal with higher food cost and the margin there guess who now has to buy these buildings pay
These the real estate costs for all of this stuff that’s all on amazon and that cuts down that margin on what they have to pay for things and how much money how much profit they’re actually making from it is much thinner for amazon than it is for google even right they just amazon bought what was it mgm uh they bought mgm so they can stream and create their own
Content on their their streaming platform similar to like a netflix i don’t think it’s probably a good move for amazon but i don’t think it is the the best possible move right the the best way to do this is take an approach like um like google has google doesn’t produce well i do produce some exclusive shows and content don’t really do that much it costs google
Nothing for me to make this video it don’t so they’re not paying like a nice studio like buying mgm they don’t have to do that youtube tv they’re not buying like they they’ll stream espn they’ll pay for that right they’ll pay for certain uh companies to be on the platform but they don’t have to make it they have to buy all of espn to show me um an nba game they
Didn’t have to do that i can watch whatever channel i was going to watch and just use youtube tv anyway they can get the 64 or whatever i’m whatever they get for me every month they’ll have to pay for all that stuff similar to disney very very similar to disney where disney isn’t making as much money because they have to pay for the tv rights for the sec network
Or pay for all the equipment and stuff for espn it’s not making them as much money like it’s they have to pay it all i’m doing is streaming so the cost for me is very low and my margins are very high almost all of google’s products is in that particular category they’re also building out a great ecosystem for android which you know contrary popularly believe uh
Might be a better phone even though yes i have an android i mean i’m sorry i do have an apple i used to have android uh but from that to chromebooks to google home to google maps to gmail to youtube to google search the list goes on all that stuff is built in a nice ecosystem and it’s something that you rely on in that when you look for something you’re looking
For information what is google’s stock today what is amazon’s stock price how what was the profit who was the ceo of amazon you probably started off at google or on youtube and the information was disseminated from there whereas you’re only going to an amazon if you’re looking to buy something specifically um so in either case i think it’s google there’s a case
To be made in terms of advertising since that’s where google’s primary pro their largest revenue generator comes from amazon sells ads so does walmart right now i could say if i’m looking to sell hats or a basket or shoes why would i spend on google where you could be looking for everything under the sun why don’t i just go and spend on amazon instead that’s fair
But people who spend money on ads is not just for physical goods right i’m not gonna buy a course on amazon that’s probably not where i’m gonna go for that but uh newspapers any digital thing lessons all that kind of stuff i’ll probably start off on a youtube i’ll probably start off on google and i may click an ad there or probably even more so on social media to
Have facebook so on and so forth i think there’s a space here and that’s not to say that that google is invincible by any any stretch of imagination but in terms of i’m really looking i’m looking at in terms of cost how much is it costing you to make this money and who’s making the most what is that margin going to be how much do you have after all the bills are paid
And the answer is google and it’s been google for a while and based on what i’m seeing from amazon that seems to be something that’s going to continue now again five years is a long time google could go go off and buy disneyland for all i know i don’t you know i’m just throwing it out there i don’t think that’s the smartest thing or or that it is a thing however
In either case things can definitely change but that’s one that’s been in google strategy from the from the very beginning they are focused on providing free stuff for the most part providing free stuff and then using that data to provide value so you know i can get into the data tracking privacy stuff however google maps is really good and it’s better than apple
Maps for a reason okay it just it just is um there’s a reason why you go to google and not bing okay it just is right so um my argument it would have to be google based on these two um they just i think amazon’s just spending too much and expanding too many areas and at some point you’re going to get too big and too wide where you can’t specialize you can’t get
Good at whatever it is you’re supposed to be good at so again my answer is google i’d love to hear your thoughts what are your thoughts on the two which one do you invest in which one do you think is going to be best in the next five years and why lastly if you have any questions that you want to become a video feel free to ask those in the comments the last two
Videos have been from mailbag submissions or comment uh comment section i gotta figure out i’ll figure out a name for it uh but thank you all for for asking great questions because we need to come with great videos and discussions like this let me know what you think in the comments like subscribe do all those things click the links um and that’s about it i’ll talk to you guys later bye
Transcribed from video
Amazon vs Google Stock | Which Stock is Best for the Next 5 Years? | AMZN vs GOOG By BuildingBread
