My Top 2 Mega-Cap Stocks to Buy After Microsoft's Latest Pullback

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Slower growth in its cloud platform Azure and the staggering costs to stay competitive in the AI race have pressured the stock amid a relatively high valuation.Fortunately, this does not mean megacap stocks are in trouble, and under current conditions, these two tech stocks are arguably worth investor consideration.Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »Image source: Getty Images.Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) might be a surprise pick, considering it's a competitor of Microsoft in the cloud and is also investing heavily in AI infrastructure. The Google parent spent $91 billion on capital expenditures (capex) last year and pledged to spend $175 billion to $185 billion this year.However, the difference with Microsoft is that investors have seen a more obvious payoff. Alphabet's Google Gemini AI engine was a later entry in this area, but it has made huge competitive strides, and some users prefer it to ChatGPT.Moreover, Google Cloud continues to outpace the growth rate of its massive digital ad platform, implying a heavier reliance on AI. Additionally, many investors expect Alphabet's autonomous driving company Waymo to be a major revenue driver in the coming years, further boosting its reputation.Amid some investor skepticism about AI, the stock has delivered a flat performance for the year. Still, its P/E ratio of 29 closely approximates the S&P 500 average, and given its growth prospects, that is probably a low enough valuation to continue attracting investor interest.Like Microsoft, investors have become leery of Amazon (NASDAQ: AMZN) due to its massive capex allocations. The company pledged $200 billion in capex spending for 2026 after spending almost $132 billion the previous year.Additionally, Amazon needs fuel and electricity for both its logistics and delivery networks. That means higher energy costs may weigh more on it than on its competitors.Nonetheless, investors have many reasons to believe the company's headwinds are short term. The primary growth and profit driver for Amazon, Amazon Web Services, has experienced more rapid growth over the last couple of quarters. That indicates that the company's massive capex spending may soon begin to pay off.Furthermore, Amazon's e-commerce segments also capitalize on AI in ways ranging from product selections to a more efficient supply chain. Those segments also include enterprises that rely partially on AI, such as third-party seller services, subscriptions, and digital advertising, which typically report double-digit revenue growth.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P Futures6,734.50 -21.00 (-0.31%)Dow Futures47,161.00 -128.00 (-0.27%)Nasdaq Futures24,798.00 -93.25 (-0.37%)Russell 2000 Futures2,503.60 -17.30 (-0.69%)VIX23.51 -3.68 (-13.53%)Gold5,028.30 +26.10 (+0.52%)Trending tickersADBE Adobe Inc. 251.86 +2.54 (+1.02%)BTC-USD Bitcoin USD 75,231.73 +2,773.41 (+3.83%)XYZ Block, Inc. 59.85 +0.06 (+0.10%)ULTA Ulta Beauty, Inc. 516.74 -18.98 (-3.54%)RBRK Rubrik, Inc. 51.67 -1.76 (-3.29%)PortfolioSign in to access your portfolioSign inTop gainersNSA National Storage Affiliates Trust 40.23 +9.29 (+30.03%)NBIS Nebius Group N.V. 129.85 +16.90 (+14.96%)BMNR Bitmine Immersion Technologies, Inc. 23.39 +2.85 (+13.88%)BCRX BioCryst Pharmaceuticals, Inc. 9.30 +1.08 (+13.14%)NSA-PA National Storage Affiliates Trust 22.72 +2.41 (+11.87%)Top losersTXG 10x Genomics, Inc. 16.69 -2.10 (-11.18%)VNET VNET Group, Inc. 9.53 -0.98 (-9.32%)PAYP PayPay Corporation 19.35 -1.79 (-8.47%)FSLY Fastly, Inc. 22.79 -1.79 (-7.28%)KLAR Klarna Group plc 14.91 -1.00 (-6.29%)Most activeNVDA NVIDIA Corporation 183.22 +2.97 (+1.65%)INTC Intel Corporation 45.76 -0.01 (-0.02%)ONDS Ondas Inc. 10.53 +0.37 (+3.64%)PLUG Plug Power Inc. 2.2400 +0.0900 (+4.19%)AAL American Airlines Group Inc. 10.49 +0.19 (+1.84%)Top economic eventsEarnings eventsMy earnings eventsEarnings events