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. 

Continue reading

Source Fool.com