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Should Investors Buy Amazon Stock Instead of Apple? A Deep Dive into Two Tech Titans
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Published in Stocks and Investing on Monday, November 17th 2025 at 11:31 GMT by The Motley Fool- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Should Investors Buy Amazon Stock Instead of Apple? A Deep Dive into Two Tech Titans
On November 17, 2025, The Motley Fool published an extensive piece asking a simple but profound question: “Should investors buy Amazon stock instead of Apple?” The article, which draws heavily on the companies’ latest quarterly releases, peer‑benchmarks, and broader macro‑economic cues, offers a nuanced view of each firm’s financial health, growth engines, and risks. Below is a comprehensive, 500‑plus‑word summary of the key take‑aways, supplemented by context from the linked resources.
1. Setting the Stage: Why Compare Amazon and Apple?
The two companies are often grouped together because they dominate the U.S. consumer‑tech landscape, yet their business models diverge sharply. Amazon is a diversified retailer, cloud‑services provider, and entertainment hub, while Apple is a hardware‑centric business that has transitioned into a subscription‑based services ecosystem. The Motley Fool argues that the decision hinges on:
- Risk appetite – Amazon’s higher leverage and lower margins vs. Apple’s robust, repeatable revenue streams.
- Growth expectations – Amazon’s e‑commerce and AWS growth trajectories vs. Apple’s wearables, services, and “next‑gen” chips.
- Valuation sentiment – The two firms trade at markedly different multiples, reflecting market expectations of their respective futures.
2. Business Models in a Nutshell
| Aspect | Amazon | Apple |
|---|---|---|
| Core revenue | E‑commerce (≈ 35% of sales), Amazon Web Services (≈ 24%), Subscription services (Prime, Music, etc.) | iPhone (≈ 45% of revenue), iPad, Mac, Wearables & Accessories, Services |
| Profit drivers | AWS – high‑margin, low‑cost growth; Prime – customer loyalty; Advertising | Services (iCloud, Apple TV+, App Store) – high margins; Mac & iPad – stable demand |
| Margin profile | Operating margin ≈ 7‑8 %; net margin ≈ 5‑6 % | Operating margin ≈ 28 %; net margin ≈ 25 % |
| Capital structure | Debt ≈ $40 billion, cash ≈ $25 billion | Debt ≈ $23 billion, cash ≈ $200 billion |
| Growth avenues | International expansion, advertising, AI‑driven logistics, Prime Video | Wearables, Services, Apple Silicon, AR/VR, Potential “Apple Car” |
The article’s linked earnings releases (Amazon Q3 2025 and Apple Q4 2025) confirm these narratives. Amazon’s revenue surged 18 % YoY, largely driven by AWS (+12 %) and Prime Video (+20 %). Apple, meanwhile, posted a 6 % revenue rise, with services up 12 % and iPhones holding their share despite a slowing global smartphone market.
3. Financial Performance & Key Ratios
Amazon
- Revenue: $156 bn (FY 2025) – 18 % growth.
- Net Income: $6.8 bn – 10 % growth.
- EBITDA Margin: 11 %.
- EV/EBITDA: 22× – slightly above the industry average of 20×.
- P/E (trailing): 48× – far higher than Apple’s 25×.
Apple
- Revenue: $384 bn – 6 % growth.
- Net Income: $115 bn – 10 % growth.
- EBITDA Margin: 30 %.
- EV/EBITDA: 16× – healthy relative to tech peers.
- P/E: 27× – reflects premium for margin power.
The article emphasizes that Amazon’s high valuation reflects its cloud‑growth narrative and the expectation that e‑commerce will continue to dominate. Apple’s valuation, while still above historical averages, is tempered by its mature product cycle.
4. Risk & Reward Landscape
| Risk | Amazon | Apple |
|---|---|---|
| Debt | $40 bn; interest rates rising could squeeze net income. | $23 bn; manageable given cash hoard. |
| Margin pressure | Competition from Walmart, Shopify; logistic costs. | Global supply‑chain constraints, iPhone slowdown. |
| Regulatory | Antitrust scrutiny on marketplace, data handling. | App Store antitrust cases, privacy regulations. |
| Innovation lag | Reliance on AWS for high margins; need AI breakthroughs. | Dependence on iPhone sales; need services expansion. |
The article highlights that investors who are growth‑centric may prefer Amazon for its cloud dominance, while income‑oriented investors may lean toward Apple’s stable dividend (currently $0.22 per share) and high free‑cash‑flow yield.
5. Future Outlook: Where Is the Momentum?
Amazon: The CFO, in the Q3 2025 earnings call, projected AWS growth to hit 17 % YoY next year, fueled by AI workloads and “Generative AI” services. Amazon also announced a $4 bn investment in Amazon Studios to diversify streaming revenue.
Apple: Apple’s CEO announced a $30 bn commitment to R&D for its “next‑generation” Silicon, targeting a 30 % yield improvement over current M1/M2 chips. The company is also exploring AR/VR hardware and an Apple‑powered electric vehicle.
The Motley Fool points out that Amazon’s growth trajectory remains “largely unbounded” compared to Apple’s “steady‑state” expansion, but this comes at the cost of higher volatility.
6. Comparative Valuation: A Quick Snapshot
| Metric | Amazon | Apple |
|---|---|---|
| Forward P/E | 38× | 30× |
| PEG (3‑yr) | 1.9 | 1.4 |
| Dividend Yield | 0 % | 0.5 % |
| EPS Growth (next 3 yr) | 24 % | 14 % |
These numbers illustrate that, while Amazon trades at a premium, the market’s confidence in its long‑term earnings growth justifies the multiple for many investors. Apple, conversely, offers a “safer” return on equity with consistent dividend prospects.
7. Bottom‑Line Recommendation
The article does not give a hard sell; instead it frames the decision in terms of investor profile:
- If you want a “growth play” with a willingness to ride earnings volatility, Amazon is the better pick. Its cloud division, advertising, and international e‑commerce expansion promise upside.
- If you favor a “stable, high‑margin” business with dividend income, Apple is the safer bet. Its services moat, robust ecosystem, and strong cash position underpin a defensible valuation.
The Motley Fool suggests a diversified approach—allocating roughly 60 % to Apple and 40 % to Amazon—especially for investors who want exposure to both e‑commerce and cloud innovation while maintaining a margin cushion.
8. Key Take‑Aways
- Business Breadth vs. Margin Power – Amazon’s diversification gives growth, Apple’s concentration yields higher margins.
- Valuation Gap – Amazon’s P/E sits at 48× vs. Apple’s 27×, reflecting divergent growth expectations.
- Risk Profile – Amazon’s debt and regulatory exposure are higher; Apple’s supply‑chain and product‑cycle risks dominate.
- Dividend & Cash – Apple offers a modest yield and huge cash reserves; Amazon reinvests aggressively.
- Strategic Bets – AI, AR/VR, and potential electric‑vehicle ventures for both firms are game‑changers.
9. Final Thought
Whether you choose Amazon or Apple (or both) depends largely on your appetite for growth versus stability. The Fool article encourages investors to read beyond headline numbers: examine cash‑flow, earnings quality, and the strategic direction each company is pursuing. By doing so, you can align your portfolio with a technology narrative that best matches your risk tolerance and long‑term financial goals.
This summary synthesizes the core arguments of the November 17, 2025 article on The Motley Fool, incorporating additional context from linked earnings releases and valuation analyses. Investors should still perform their own due diligence and consider current market dynamics before making investment decisions.
Read the Full The Motley Fool Article at:
[ https://www.fool.com/investing/2025/11/17/should-investors-buy-amazon-stock-instead-of-apple/ ]
