Better Buy: Tesla vs. Alphabet Stock

Tesla (NASDAQ: TSLA) and Google parent-company Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) may not have a lot of similarities in terms of the products and services that they sell.

As investments, however, they're becoming more and more similar. Tesla and Alphabet are both high-margin businesses that generate a ton of free cash flow (FCF), which can

be used to accelerate investments, keep debt off the balance sheet, repurchase stock, and make strategic acquisitions. It's a significant advantage, no matter the business

cycle.  Unfortunately for both companies, their respective industries are cyclical and vulnerable to a recession. Demand for consumer-discretionary products -- like cars,

as well as ad budgets -- decline during a weakening economy, and this could impact the growth of Tesla and Alphabet in the short term.  But over the long term, the

investment thesis for each growth stock remains brighter than ever. Here's why.  Aggressive expansion plans  Howard Smith (Tesla): Tesla and Alphabet are both growth

stocks, but that doesn't mean they belong in the same portion of a portfolio. Balancing a decision to invest in one of these two stocks is a classic example of risk versus reward.

For those able to tolerate more risk, there could be much more of a reward over the long run with an investment in Tesla.  The electric-vehicle (EV) maker is still early in

its growth and expansion phases. One can see just how much faster Tesla is expanding by looking at the rate of revenue growth over the past five years.