, Inc. (NASDAQ:AMZN): Why, Inc. (AMZN)…, Inc. (NASDAQ:AMZN) reported impressive first quarter earnings last week, and shareholders were rewarded with a big price pop as a result.

In contrast, Google shares tumbled despite beating estimates of their own. So, why the dichotomy? As CNBC reports, one prominent Wall Street mind has a very good explanation:

[T]here’s a key contrast between these companies’ long-term growth opportunities, according to Macquarie analyst Ben Schachter.

“Virtually every opportunity that GOOG invests in is going to be structurally lower margin than its core search business, whereas virtually every opportunity that AMZN invests in is going to be structurally higher margin than its core ultra-low margin retail business,” he wrote in a note to clients.

That’s because Amazon’s core e-commerce business is super low margin, while their AWS cloud segment, healthcare ambitions, and popular hardware are all much higher margin units seeing strong growth.

In contrast, Google’s core search business remains its highest margin offering — although those margins have been falling in recent years amid much higher costs. Meanwhile, the tech giant’s new efforts like YouTube, cloud computing, and hardware see much lower margins.

“GOOG is clearly still doing the right thing and investing for the future, but that is a lower margin future,” Schacter concluded., Inc. shares closed at $1,572.62 on Friday, up $54.66 (+3.60%). Year-to-date, AMZN has gained 34.47%, versus a 0.29% rise in the benchmark S&P 500 index during the same period.

AMZN currently has a POWR Rating of A (Strong Buy), and is ranked #1 of 51 stocks in the Internet category.

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