Hidden Gems in Tech: Why Amazon and Alphabet Are Key to Building a Million-Dollar Portfolio

Creating a retirement portfolio worth a million dollars is an achievable goal with the right strategy. By consistently contributing modest amounts monthly to a diversified stock portfolio over several decades, investors can harness the power of compounding returns. For instance, starting with a $50,000 portfolio and adding $200 per month at an average annual return of 10%, one could reach the million-dollar mark within 30 years. This assumption aligns closely with historical market performance. If your savings are idling in a bank account earning negligible interest, it may be time to consider opening an investment account. Two tech giants—Amazon and Alphabet—are positioned to significantly enhance portfolio value due to their reasonable valuations and growth potential.
Amazon's dominance in both e-commerce and cloud computing continues to drive steady expansion. The company holds a commanding lead in U.S. online retail and global cloud services through its Amazon Web Services (AWS) division. Despite already capturing a substantial share of the e-commerce market, there remains ample room for growth. As of early 2025, online sales accounted for only 16.2% of total retail transactions in the United States, indicating significant untapped potential. Amazon's North American retail sales increased by 8% year-over-year last quarter, while international sales also grew similarly after adjusting for currency fluctuations. Meanwhile, AWS experienced even faster growth at 17%, fueled by rising demand for artificial intelligence infrastructure. With these robust growth drivers intact, Amazon remains a compelling long-term investment opportunity.
Alphabet, the parent company of Google, presents another attractive option for investors seeking strong returns. Although concerns persist regarding competition from emerging AI players like OpenAI, Alphabet’s financial performance remains resilient. Last quarter, Google Search revenue reached $50.7 billion, marking a 14% increase on a currency-neutral basis. While OpenAI poses a challenge, Alphabet is actively countering with its own AI tools, such as Gemini, which is gaining traction among users. Moreover, Alphabet has diversified beyond search into areas like Google Cloud, YouTube, and autonomous driving via Waymo. Google Cloud, in particular, is expanding rapidly, growing at a rate of 28% annually and approaching $50 billion in annualized revenue. Within five years, this division is projected to surpass $100 billion in revenue, further bolstering Alphabet's earnings potential. Trading at a relatively low price-to-earnings ratio of 20, Alphabet offers solid value backed by a history of innovation and impressive earnings power.
Incorporating Amazon and Alphabet into a well-diversified portfolio can pave the way toward achieving millionaire status by retirement age. Both companies boast enduring competitive advantages in their respective markets, ensuring they remain key players in shaping the future of technology and commerce. Their proven track records of innovation and growth make them ideal candidates for long-term investments, capable of delivering substantial returns over time.