2 Safe AI Stocks to Buy in the Next Market Crash. And No, It's Not Palantir.

Artificial intelligence (AI) has created enormous opportunities for investors. But it has also pushed many AI-related stocks to expensive valuations. That becomes a problem when the market turns. Even promising companies can suffer steep declines when investors become less willing to pay for future growth.

So, when the next market crash arrives -- and some argue that it has already begun -- where should investors look?

Two companies worth watching are Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL). Neither is immune to a sell-off. But both have something many AI-focused companies lack: large, established businesses that generate substantial profits and provide a foundation for their AI ambitions.

Palantir Technologies may be one of the most exciting AI software companies. But investors looking for a more established way to benefit from AI should not overlook these two giants.

Image source: Getty Images.

Amazon has more than one engine for growth

Amazon is often associated with online shopping. But its business is much broader. It has three major engines: e-commerce, digital advertising, and Amazon Web Services (AWS), its cloud computing business. AWS is particularly important to the AI opportunity. Companies need computing power to develop and run AI applications, and many rely on AWS to provide the infrastructure.

Amazon's latest results show how strong this business has become. In the third quarter of 2026, AWS revenue grew 39.3% year over year to $46 billion. Its annualized revenue run rate reached approximately $184 billion. Meanwhile, Amazon generated total revenue of $201.9 billion, up 12% from a year earlier, and operating income reached a record $28.1 billion.

The attraction is straightforward: Investors are not relying on AI alone to support Amazon's business. Its retail and advertising operations provide additional revenue, while AWS gives it a direct stake in the growing demand for cloud computing.

However, there is an important risk. Amazon is spending heavily to expand its infrastructure. Its trailing 12-month free cash flow was negative $42.4 billion, while capital expenditures increased by $94.8 billion year over year. Management expects cash capital expenditures of around $220 billion in 2026.

That is a substantial commitment, and investors need to see the spending translate into durable revenue and profits in the coming years.

Alphabet has multiple ways to monetize AI

Alphabet offers another compelling route into AI. Its advantage is not simply that it has developed Gemini, its family of AI models. It also owns businesses with enormous reach, including Google Search, YouTube, and Google Cloud. These businesses give Alphabet several ways to bring AI to customers and generate revenue from it. For example, AI can improve search results and advertising relevance. It can also encourage businesses to spend more on Google Cloud as they develop and deploy AI applications.

The latest results show that the opportunity is already contributing to growth. Alphabet reported third-quarter 2026 revenue of $127.6 billion, up 25% year over year. Google Cloud revenue surged 103% to $30.7 billion, while Search revenue increased 12%.

This matters because Alphabet does not have to build an entirely new business to benefit from AI. It can introduce AI into products that already reach billions of users and serve millions of businesses.

Still, the investment is not without risk. Alphabet's capital expenditures totaled $51.4 billion in the third quarter, and free cash flow turned negative at $9.1 billion. As with Amazon, investors need to decide whether the returns justify the enormous investment.

What investors should watch for in the next market crash?

Amazon and Alphabet are not immune to a market crash. Their shares could fall sharply during a market crash, particularly if investors become concerned about AI spending or valuations. For instance, Alphabet's stock price has recently declined following its third-quarter results, largely due to concerns about AI spending.

But their established businesses give them a different foundation from companies whose investment cases depend almost entirely on future AI demand. That distinction matters when markets become fearful. A sell-off could create an opportunity to buy either company at a more attractive price.

But investors should not buy simply because the share price has fallen. They should examine whether the underlying businesses remain healthy, whether AI investment is producing meaningful returns, and whether the valuation offers enough room for error.

For Amazon, watch AWS growth, operating margins, and free cash flow. For Alphabet, monitor Search performance, Google Cloud profitability, and the returns generated by its capital expenditures.

The goal is not to predict exactly when the next crash will happen, but to know which businesses you want to own, buy when the opportunity comes, and monitor them over time.

Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, and Palantir Technologies. The Motley Fool has a disclosure policy.