Got $5,000? 2 Stocks the Fed's Rate Decision Just Made More Attractive

Stock investors tend to think that lower interest rates translate into higher stock prices. While that is often true, some companies benefit when interest rates hold steady, and yes, many of those are outside the financial sector.

This is because comparatively higher rates are often a sign of economic health. Moreover, many companies have attained a level of wealth that allows them to invest as they please, regardless of interest rate levels.

In today's environment, the Fed has held off on further interest rate cuts. Knowing that, if one has $5,000 to invest, these two cloud stocks could benefit.

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Alphabet

At first, one might think investors in Google parent Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) would not welcome the end of interest rate cuts. For all of the focus on new technologies, digital ads remain its primary revenue source, and that could mean lost business if customers have to contend with higher rates.

Nonetheless, Alphabet continues to look to its AI-driven future. Its most visible sign of that is Google Cloud. In 2025, its revenue grew by 36%, far above the 15% for the overall company. This is critical because AI fuels productivity gains. Assuming such gains mean customers have to borrow less money, it could lead to benefits even in today's interest rate environment.

Additionally, investors have focused increasingly on the market-share gains of Google Gemini and the successes of autonomous driving company Waymo. Although these do not show up directly in the company's financials, they look to be growth drivers that could speed the company's transition away from digital ads.

In 2025, Alphabet earned net income of $132 billion, 32% more than in 2024. This and its $127 billion in liquidity position it to invest a staggering $175 billion to $185 billion in capital expenditures (capex) this year, growth that will likely boost growth in the future. Amid Alphabet's increased success, the 27 P/E ratio seems like a relatively low valuation considering its prominent role in the tech industry.

Investors should also remember that Grand View Research forecasts a 31% compound annual growth rate (CAGR) for the AI industry through 2033. That should make it more likely to earn returns from its massive capex investments.

Under current conditions, one can buy 8.5 shares for around $2,460, an excellent starting position in a tech stock that operates largely independently from interest rates.

Amazon

Admittedly, one might not think of Amazon (NASDAQ: AMZN) as a company that welcomes steady interest rates. Indeed, its largest revenue source is online sales, and it "sells everything," so it seems lower rates would be a net benefit.

However, the growth and profit engine of the company is Amazon Web Services (AWS). It accounted for $46 billion of the company's $80 billion in operating income in 2025.

As the leading cloud computing company, it plays a prominent role in the AI field. Moreover, Amazon incorporates AI into its online sales sites and digital ads, and improves productivity in its fulfillment centers.

Such improvements can save money for both the company and, by extension, its customers. Thus, like Alphabet, Amazon will fuel productivity gains that can make activities tied to higher interest rates less significant.

To this end, it plans to spend a staggering $200 billion on capex this year. Fortunately, it holds about $123 billion in liquidity and earned $78 billion in net income in 2025, indicating it can afford this expense without having to turn to the debt market.

Additionally, investors should keep an eye on valuation. Its P/E ratio has fallen to 30. While it compares well to the S&P 500 average of 28, Amazon is a stock that usually commanded P/E ratios above 50 in the recent past, arguably making it a generational buy.

As conditions stand now, a $2,540 investment buys 12 shares in the company. As its massive capex spending starts to deliver returns for the business, its low valuation could fuel a disproportionate benefit for its shareholders.

Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Amazon. The Motley Fool has a disclosure policy.