Investors have loved the greatest growth stories in America since the dawn of the modern era. So what if these great growth companies are impossible for shareholders to make many waves in, and so what if dividends are just too old-school. Being along for the rise is generally more important, at least if you are on the right side of it. With the bull market having lasted from March 2009 to May of 2015 without a major bear market, here is the ultimate bull market investor question. Between the great Alphabet Inc. (NASDAQ: GOOGL) and Amazon.com Inc. (NASDAQ: AMZN), which stock can hit the $1,000 mark first.

Investors should understand that just asking this question might be a jinx. It may seem like pure bull market speculation on the surface. Yet, it is also a legitimate question that bullish growth investors might want to consider. If these companies continue on their path of growth and great surprises, one or both of the stocks could get to the $1,000 share price.

There might be more issues in common with these companies than meets the eye. Both are dominated by their founders, and both companies are now mega-cap giants in their fields. Both have highly complex models and they have potentially endless avenues for growth ahead as they can disrupt industry and after industry. Analysts and investors alike are enthralled by them.

Alphabet shares have close to a $718.00 share price, with a $493 billion market cap. Revenue in 2015 was $74.9 billion, and net income was $16.35 billion before special items. The company formerly known as Google has a 52-week trading range of $538.85 to $810.35.

Amazon shares trade at close to $698.00, with a $329 billion market cap. Its revenue was $107 billion in 2015, but net income before items was only $596 million. Amazon’s 52-week range is $419.14 to $722.45.

High growth rates are expected to remain in place, according to Thomson/First Call consensus estimates. Google’s 2018 revenues are expected to be $115.1 billion, some 54% higher than in 2015. By 2018, Amazon’s revenue is expected to have risen by another 82% from 2015 to $194.6 billion.

Where things get tricky is over gross margins. Alphabet’s gross profit margin was 63.5% in 2015, and Thomson/First Call sees that remaining 65.0% in 2018. Amazon’s gross margin, which is a constant sticking point for many investors and analysts alike, was 33.0% in 2015 and it is expected to be 36.5% in 2018.

Net income is another massive disparity here. This is the after-tax income and can fluctuate wildly. Alphabet is expected to see net income rise to $33.4 billion in 2018, up 63% from 2015. Amazon’s net income is expected to be $8.1 billion in 2018, up 13-fold from 2015.
Another common bond between Amazon and Alphabet is that they do not pay dividends, nor are they massive buyers of their own common stock. That could change at any time, but these companies both prefer to use capital to grow their businesses and to keep a cushion. Amazon has close to $16 billion in cash and short-term investments, versus a much larger sum of $80 billion (cash and short-term and long-term investments) for Alphabet.

Another area where Alphabet and Amazon have something big in common is that they are both overly loved by analysts on Wall Street — as well as by investors on Main Street. Alphabet has about 38 analysts with Buy ratings, versus about 30 Buy ratings for Amazon, but both have almost no major sell biases.

Alphabet’s consensus analyst price target is $910.84 (versus a current price of about $718), and Amazon’s consensus analyst target is $792.18 (versus $698). Alphabet’s highest price target is $1,100, versus $1,000 for Amazon.

24/7 Wall St. reviewed how analysts see Alphabet after earnings, and how they see Amazon after earnings too. Amazon’s marketplace was just forecast to add another $50 billion to $100 billion in value. The $1,000 Amazon stock call was covered in detail.

What is obvious here is that both Alphabet and Amazon remain high-growth companies. Google has come a long way from being only worried about search, and Amazon has come a long way from delivering books and CDs cheap and fast.

It is very possible that both Amazon and Alphabet will have very big new sources of revenues by the year 2018 or 2020, which were not factored into these models. We did not do a segment by segment growth forecast, nor did we speculate about which new sources of revenue not on the books today could ramp into the billions of dollars in the coming years. That has been rather well documented and we aren’t going to go speculate on top of speculation and supposition.

Regulatory risks remain here for both companies. The European Union wants billions from Alphabet for the dominance of Google in search. States want Amazon to pay more taxes, and Donald Trump has even named Amazon as a potential antitrust violator. These could become big issues, or these risks could fade.

Investors do not seem to mind that Larry Page and Sergei Brin have hijacked total control over Alphabet. That could change if spending gets zany or if performance slips. Investors have not minded that Jeff Bezos runs Amazon like a nonprofit while he scuttles segment after segment in retail and business. That could change too, and at some point investors will demand that margins and income become acceptable.

On the surface, Alphabet looks like it has a chance of getting to $1,000 faster than Amazon. Again, either company could surprise — just like saying that either company could become a disappointment. One other risk to consider here is that Alphabet already passed Apple in market cap once, and we have seen over and over that mega-cap stocks run into a point where it becomes ever harder to pull in new investor money because it takes too much money in and out to move the needle.

The last reminder here is that making massive upside projections (or even analyzing how to get to a major milestone) often coincides with a “kiss of death” for the market or for a sector. Major upside projections just have that history.

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