Price objective basis & risk Alphabet (GOOGL / GOOG) Our price objective is $1025/$1025, representing 17x our core 2018 Google non-GAAP EPS estimate (excluding non-Google losses), plus $118/share in cash, or 21x core Google GAAP EPS plus cash. Alphabet has traded at 12-24x forward P/E over the last five years and we think our 17x multiple is reasonable given shareholder friendly actions that include the non-core revenue and operating loss disclosures, and stock buybacks. Downside risks to our PO are: 1) Search revenue growth decelerates faster than anticipated due to market maturity, 2) mobile transition drives negative search behavior changes, 3) revenue growth pressure from competitor initiatives, 4) margins disappoint due to revenue mix and investment initiatives, and 5) negative regulatory changes, including EU antitrust. The stock has been subject to heavy volatility in the past based on revenue growth and margin trends and this volatility could increase if economic conditions deteriorate. Amazon.com (AMZN) Our PO of $1,100 is based on our SOP that values AWS at $127bn or $259 per share and the retail business at $413bn or $841 per share. Our 5.5x AWS multiple is a modest premium to the software/SaaS comp group at 5.0x on 2018 sales, and 0.9x multiple is a premium to a retail general merchandise comp group at 0.7x. We think the premiums are warranted given share gains and superior growth. Our $1,100 price objective implies 2.8x 2018E Price/Sales, a multiple above the high end of Amazon's historical range of 1.0-2.5x. We argue the historical P/S multiple should increase given positive 3rd party sales (3P) that is reported on a net basis, a higher AWS revenue contribution, and record gross profit margins. Downside risks to our price objective are a consumer spending slowdown, rich P/E multiple, margin or growth pressure from the digitization of media, more aggressive offline competition, hardware strategy, AWS investments and/or price cuts, Prime Instant Video co