Both companies posted strong earnings reports on Thursday. Amazon's adjusted earnings beat expectations by 67 cents, while Alphabet's beat by 38 cents.
Trader Dan Nathan said that even though Amazon is pressuring traditional retailers, he sees most of the value of the company as being based on potential margin growth and speed of expansion of Amazon Web Services. Nathan said that what worries him is that Alphabet, IBM and Microsoft are all competing for market share in the same space.
Trader Tim Seymour said that Alphabet still "has a long way to go." He said that the company is more diversified than most people realize.
"It's not just YouTube. These guys have their entire web business. They have the entire search business. These are cash cows," Seymour said, adding that this is the better stock to own between Alphabet and Amazon because of its valuation.
Trader David Seaburg agreed and said Alphabet is the better buy over Amazon on a near-term, relative value basis.
Trader Steve Grasso said Facebook might be a better stock for investors looking for growth.