Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN) have been streaming video before digital shows and movies were cool. There's now a plethora of online platforms available for content-hungry consumers, but a few years ago it was Amazon's Prime Video turning heads by winning more trophies than Netflix at the 2015 Emmy Awards presentation.

Amazon is no longer a major threat to Netflix. Amazon does crank out a cult favorite series from time to time, but it's not the hit factory Netflix has become over the years. However, pitting Netflix against Amazon as investments based solely on where each one stands in the streaming video food chain isn't fair to the world's largest online retailer. Amazon is naturally a much larger enterprise -- one in which streaming video barely moves the needle. Let's size up to the middle children of the FAANG stocks family to see which one is the better buy.

A woman curled up on a chair watching TV as she handles the remote.

Image source: Getty Images.

Center of attention

Netflix is the top dog in premium streaming video. It isn't even a close competition, as it was commanding the couches of nearly 193 million paid streaming accounts worldwide by the end of June. When your friends are buzzing about a new show there's a good chance it's on Netflix.

Amazon is the much larger overall company. It has delivered $322 billion in revenue over the past four quarters, towering well above Netflix with its nearly $23 billion in trailing top-line results. Amazon is the country's second-most valuable public company by market cap. We mostly know the company Jeff Bezos built for its online storefront, but between its AWS cloud computing platform and its Whole Foods Market grocery store chain, Amazon is also a force in new tech and old trades. 

Neither stock is cheap by conventional valuation measuring sticks, but they are undisputed growth darlings that have earned their market premiums. I usually wait until the end of these columns to crown the winner, but I'm going to tap Amazon as the better buy here early -- and wrap up by explaining my thought process. 

Let's start with growth. The assumption may be that the more nimble Netflix is growing faster than Amazon, but that's not the case these days. Revenue climbed 21% higher in Netflix's latest quarter, but net sales at Amazon during the same three-month period clocked in 40% higher. A popular narrative is that Netflix is the stock to own in the new normal, but it's actually Amazon that has been able to accelerate its business in the wake of the pandemic. 

Now, let's talk about moats. Netflix has a stronger moat than naysayers think. It should have nearly 200 million paying customers by the end of this year, and that's the kind of scale that makes content cheaper to acquire on a per-subscriber basis. It's also where content creators want to pitch their shows and movies. There are a lot of streaming video services these days, but Netflix continues to dominate.

Amazon also has a great moat. With more than 150 million Amazon Prime members worldwide it's the first place people go when they need to buy something online. Brick-and-mortar chains may be beefing up their e-commerce initiatives, but Amazon's only widening the gap with every passing quarter. 

Both companies are built to thrive in the current climate, and I expect both to beat the market. However, despite owning Netflix personally I have to give the nod to Amazon here. It's the least likely of the two companies to be disrupted. Amazon also has the more compelling valuation despite offering similar long-term growth potential. Revenue is expected to slow to the high teens in 2021 for both dot-com darlings. They should both be winners, but Amazon is the better buy right now.