After I published my Perfect Portfolio, a sharp-eyed reader emailed me with a fair question:

“Why no Amazon?”

It’s a great question.

I’m a fan of Amazon. I use it. And I’m extremely bullish on its cloud division, AWS, which is arguably one of the most important business units in the entire global economy.

But there’s a reason Amazon didn’t make the cut.

It comes down to a blend of macro risk, valuation, and what I believe is one of the most misunderstood and undervalued assets in the world: Alphabet’s Waymo.

When building a concentrated portfolio, every pick has to earn its seat.

I wasn’t looking to fill it with the usual FAANG suspects just because they’re familiar.

I was looking for businesses with asymmetric upside, strong moats, and long-term durability.

Both Alphabet (GOOG) and Amazon (AMZN) are world-class businesses.

But here’s how Alphabet won out.

First, let’s talk macro risk.

Amazon’s business is more exposed to global trade disruptions than Alphabet’s.

In a world that’s starting to flirt with deglobalization (think tariffs, rising protectionism, and fractured supply chains) that exposure matters.

Amazon is a logistics powerhouse.

That’s usually a strength.

But it also means higher vulnerability to cost pressures, inflation, and policy changes.

Alphabet, by contrast, is almost entirely digital.

Its costs don’t rise when container prices double or when tariffs hit goods coming from Asia.

That gives Alphabet an extra layer of resilience in today’s uncertain environment.

On the cloud front, both companies are dominant.

AWS remains the gold standard in cloud computing, and Google Cloud is catching up fast, especially in enterprise deals.

I’d call the cloud businesses roughly even when it comes to long-term potential.

But what tips the scale for me is valuation.

Amazon’s profit is still disproportionately driven by AWS. And their retail business is high-revenue, low-margin.

Meanwhile, Alphabet generates meaningful profit from multiple segments (Search, YouTube, Google Cloud) each of which could be a standalone empire.

And Alphabet trades at a more reasonable 18.5x P/E compared to Amazon’s 30.5x P/E – while having similar growth profiles.

Still, the real tiebreaker for me is Waymo.

I believe Waymo is one of the most undervalued assets in the world.

It gets almost no attention from Wall Street. But the product is already operational in Phoenix, San Francisco, Los Angeles, Miami, and yes – Austin.

I’ve ridden in a few now. It’s not a demo. It’s not a gimmick. It works.

If Waymo reaches scale and profitability, it could unlock hundreds of billions of dollars in value.

It’s like Alphabet is hiding a future transportation company inside its balance sheet – and the market hasn’t priced it in.

Amazon has moonshots too: Project Kuiper, humanoid robots, and next-gen warehouses.

But none of those are as close to real-world impact as Waymo is today.

This isn’t to say Amazon is a bad investment. Far from it.

Over the next decade, I expect AMZN to thrive, especially as AI becomes more deeply embedded across its business lines.

But when it came down to picking one for my Perfect Portfolio – I chose Alphabet.

Fewer macro risks. Stronger margin profile. More diversified revenue streams. And a sleeper asset in Waymo that could be one of the decade’s biggest surprises.

That’s why Alphabet made the cut. And why Amazon, for now, stays on the watchlist.