Google (2)The latest results from Alphabet and Amazon are out, and to describe the two sets in alphabetical order, one set made the markets happy, the other made them glum. But maybe this just goes to show how short-term their thinking is.

Who knows what tomorrow may bring, so let’s go out and spend it all on a jolly. Maybe that is the definition of short-term thinking. But the markets are pretty good at that, too.

Yesterday, Alphabet revealed that it has been watching the cents, maybe not quite so much of a star gazer with its moon-shot projects, and the markets love that. Amazon is in investing mode again, and the markets hate it.

The latest results from Alphabet were impressive enough, with its moderately well-known subsidiary, Google, having another humdinger of a quarter. Ad revenue at Google was up 18.1 per cent to $19.82 billion. Cost per click is down, falling by 11 per cent, but the number of clicks were up, increasing by 33 per cent. And mobile was behind the jump, the one area of the Google business that until very recently analysts worried about.

But, revenues from other areas were up 38.3 per cent. The markets really liked that bit, we are seeing a new emphasis from the company, almost as if it is worried about keeping the costs down. Look after the pennies, and the pounds look after themselves, as they say, and ever since the company was restructured, with a psychological wall between Google and the other bets, that’s what it has been doing. As a rule, shareholders don’t like the 'bet' word, and these days the rest of the business is expected to be that little less reliant on the cash-generating machine that is Google.

This new look Alphabet, with financial discipline at core, is illustrated by the news that it is curbing its expansion of Google Fiber – this is a company that has a whiff of maturity about it.

Amazon, on the other hand, announced much lower profits than expected – $252 million around 50 per cent off expectations. Amazon’s CFO told investors that the company had seen a step-up in investment and the shares fell to earth, like a drone running on empty.

Shareholders in Amazon are fed up with the promise of jam tomorrow.

Think of it this way. In the latest quarter, Alphabet’s net income was $5 billion. Earnings per share were $9.06, compared to $0.52 at Amazon. The share prices are similar – $817 for Alphabet and $818 for Amazon, yet earnings per share at Alphabet are around 18 times more.

So, the Amazon share price has a lot of hope built into it.

Even so, both Alphabet and Amazon are nicely poised for the technological revolution coming our way, and maybe the best preparation for that is indeed investment. It’s long-term thinking that will determine which of the big techs continue growing into the future.