Jim Cramer has placed himself on a significant bet with respect to two of the largest technology conglomerates that are leading the current artificial intelligence (AI) revolution.
The former hedge fund manager believes that investors ought to buy the shares in Alphabet and Amazon at this point because he says that the stock of the companies is fairly valued compared to their past record.
Cramer’s Conviction Calls
Cramer, whose hedge fund has earned him an average of 24% over the 14 years that he has managed the fund, has just given a thumbs up to the deals of acquiring Alphabet at an estimated 300.93 per share and Amazon at an estimated 218.93.
Though both equities have since fallen compared to the high when he made his recommendation, he regards the current fall as a good entry point, and says that he bets that the market continues to increase in 2026, albeit noting that he regretted that he had sold earlier that year.
Alphabet’s Cloud Surge
The fourth-quarter revenue of 2025 of Alphabet was $113.83 bn exceeding the consensus 2025 revenue. Additionally, Google Cloud’s revenue increased by 35% to $11.4 billion this quarter from $8.4 billion in the same period last year.
The cloud business has grown to a higher annualized revenue of over $70 billion and the backlog has been increasing remarkably by 55% quarter-on-quarter.
Plays a role in Amazon AI Infrastructure
Amazon Web Services brought forth $35.6 billion quarterly income in the fourth quarter, which is 24 % higher and a 13 quarter high growth.
The Trainium and Graviton proprietary processors produced by AWS now have an annual revenue run rate of over $10 billion with triple-digit growth. The current $38 billion multi-year agreement between OpenAI and AWS is being expanded by $100 billion over the course of eight years.
In order to meet the demand for Stateful Runtime, Frontier, and other advanced workloads, OpenAI has committed to using about 2 gigawatts of Trainium capacity via AWS infrastructure. This agreement reduces the cost and increases the effectiveness of large-scale intelligence production.
Although they declare their plans to have capital spending of $200 billion in 2026, Morgan Stanley identifies Amazon as the biggest underestimated victor in the sphere of generative AI. Analysts estimate a median price of $285 or an upside of 31 % against the current stock price of $217.
The Road Ahead
Both companies are investing heavily in AI infrastructure and at the same time they are commercializing their cloud platform at a rate that is outpacing the capacity growth. Their proprietary chip approaches place them in a position to seize enterprise AI spending to which there are no signs of slowdown.
The current pullback can be viewed as an exceptional chance to purchase assets of pivotal importance in the AI economy at sensible prices by investors of long-term viewpoints.
